motion and mobility - zf friedrichshafen€¦ · our tradition and values strengthen our managerial...

SHARE RESPONSIBILITY GLOBALLY

IMPROVE EFFICIENCY PERMANENTLY

LEVERAGE OPPORTUNITIES JOINTLY

DEMONSTRATE RELIABILITY DAILY

MOTION AND MOBILITY

3

75 000 employees

billion sales€

121 production companies

17.4

service partners650

Shaping the future responsibly

Our enthusiasm for innovative products and processes and our uncompromising pursuit

of quality have made us a global leader in driveline and chassis technology. We are contrib

uting towards a sustainable future by producing advanced technology solutions with the

goal of improving mobility, increasing the efficiency of our products and systems, and

conserving resources.

Our customers in the automotive and industrial sectors welcome our determined focus on

products and services, which provide great customer value. Improvements in energy effici

ency, costeffectiveness, dynamics, safety, and comfort are key to our work. Simultaneously,

we are aiming for continuous improvement in our business processes and the services we

provide. As a globally active company, we react quickly and flexibly to changing regional

market demands with the goal of always providing a competitive price/performance ratio.

Our independence and financial security form the basis of our longterm business success.

Our profitability allows us to make the necessary investments in new products, technologies,

and markets, thus securing the future of our company on behalf of our customers, market

affiliates, employees, and the owners of ZF.

Our tradition and values strengthen our managerial decisions. Together, they are both an

obligation and an incentive to maintain a reliable and respectful relationship with customers,

market affiliates, and employees. Our worldwide compliance organization ensures that locally

applicable laws and regulations are adhered to. We accept our responsibility towards society

and will protect the environment at all of our locations.

Our employees worldwide recognize us as a fair employer, focusing on the future and offe

ring attractive career prospects. We value the varied cultural backgrounds of our employees,

their competencies, and their diligence and motivation. Their goaloriented dedication to ZF,

beyond the borders of their own field of work and location, shapes our company culture and

is the key to our success.

Corporate Statement

54

Dear Readers, Technology is for people, not the other way round. This is nothing new for ZF. For almost a century, we have been working on generating added value for our customers with our innovative technologies i.e. for those individuals worldwide who want to get things moving using ZF technology and who want to experience the ultimate in efficient mobility. In the future, this aspiration will become instantly recognizable: “Motion and Mobility” is not only the title of this Corporate Report, but is also our new slogan, which will be firmly associated with ZF's name in all its markets.

This Corporate Report aims to introduce you to the world of ZF and help you get to know the company better: You will find that ZF is a technology-driven company which responds to global megatrends and is dedicated to improving efficiency in all areas. ZF is a global player whose strategy places the needs of customers and employees firmly on the center stage. It is a reliable company for which economic success, sustainability, and responsibility are equally important.

Our initiatives for enhancing sustainability and resource conservation are important in this respect. We intend to publish our very first sustainability report on the Internet in the middle of the year, which will include detailed information based on the Global Reporting Initiative (GRI) standard.

ZF not only makes motion possible, the company itself is also on the move. Growth over the past few years has helped us expand our global presence and our technology portfolio. More than ever, we are now able to fulfill our goal of giving people access to this technology worldwide: ZF – Motion and Mobility.

I hope you enjoy reading our Corporate Report and find it informative.

Yours,

Friedrichshafen, April 2013

Chief Executive Officer Dr. Stefan Sommer on Responsibility, Efficiency, Opportunities, Reliability, and Sustainability

Preface

76

RESPONSIBILITY GLOBALLY

EFFICIENCY PERMANENTLY

OPPORTUNITIES JOINTLY

RELIABILITY DAILY

The City – A Cosmos Benefit from Differences Environment, Climate, and Resources

Buying Time for New Solutions Technology with Turbo Efficiency Innovations of Great Value

Across Borders Success in the Team A Global Presence Close to the Customer

Earning Trust Embracing the Corporate Culture Working Together Managing and Doing Business Sustainably Key to Success Always a Step Ahead

30 IMPROVE

8 SHARE

52 LEVERAGE

84 DEMONSTRATE

98

RESPONSIBILITY EFFICIENCY OPPORTUNITIES RELIABILITY

Global megatrends have a considerable influence on today’s businesses. To ignore them would be unwise in the extreme. As a responsible multinational com pany, ZF is today aligning itself to what will be important tomorrow – for society, for personal mobility, for the environment, and for the industry.

SHARERESPONSIBILITY

GLOBALLY


1110

Today, more and more people are living in major conurbations around the globe. With numbers rising all the time. All of which calls for good organization. And that is where ZF technology can also help.

The City – A Cosmos

The megacity is the symbol of the 21st century. The num-ber of urban dwellers is rising all the time on all conti-nents. In 2002 – for the first time in human history – more people were living in urban centers than in rural areas. According to UN forecasts, 70 percent of the popu-lation will be urban dwellers in 2050. The logical conse-quence is that cities themselves are also growing. In 1970 there were just two megacities around the globe – i.e. con-urbations with more than ten million inhabitants: Tokyo and New York. Today there are 23. In 2025 there are expected to be 37 megacities around the globe. Plus another 59 huge cities with between five and ten million inhabit-ants. What attracts people to cities? First and foremost, the prospect of a better life, with more job opportunities, easier access to education, a broader range of culture and social interaction, or better service provision. Yet it is often crises and emergencies that drive the rural popu-lation in their thousands to the nearby cities. Mega-

urbanization can also be described as mass rural exodus. The poverty of many of these new urban dwellers poses enor-mous challenges for these huge metropolises. Housing and infra structure need to keep pace with this influx, creating a need for municipal services such as electricity and water supply, sewage systems, and waste disposal. And all without damaging air quality or hampering urban mobil-ity. Sustainable urbanization will be one of the major challenges over the next few decades – and that is where ZF products excel.

Green construction

Megacities are economic powerhouses for entire regions and countries. For example, China and India are investing huge sums in major infrastructure projects, such as modern-izing the road network around their largest metro-polises. Despite – or because of – the building boom the local construction industry is facing capacity bottlenecks.



13

Construction machinery with outstandingly low operating costs, which is easy and safe to handle and also increases productivity, is in great demand. Wherever government agencies award construction contracts, they are increas-ingly focusing on overall CO2 emissions − take Europe as a case in point. ZF with its transmissions and chassis systems for construction machinery ranks among the key suppliers of efficient, environmentally friendly technology that conserves resources: A ZF transmission finds its way into one in six construction machines around the world. And because ZF products for construction machinery have a modular design, they cover virtually all application requirements – from small and large wheel loaders and dumpers, to excavators and telehandlers. Construction machinery customers looking in particular for optimum efficiency coupled with operating comfort can order the Efficiency Package: ZF bundles in this package all trans-mission hardware and software innovations that boost productivity. The result is a potential 15 percent cut in fuel consumption – equivalent to around 2.5 liters (0.66 gallons) of diesel per operating hour.

The logistics of food and goods

An increasing population puts a strain on agriculture: If agriculture cannot increase its productivity at the same pace, food shortages pose a real threat in urban and rural areas. It is not simply a question of additional agricultural land or more sophisticated fertilizer chemistry; it is also

about farming existing agricultural land more efficiently – using state-of-the-art technology for agricultural machin-ery. ZF axles and transmissions are important elements in the quest to make agricultural machinery more efficient. The most recent example is the Eccom transmission for large tractors. Its infinitely variable transmission ratio keeps the engine speed constant even with large tractors up to 420 hp (309 kW) – since there are no gear changes and hence no power loss. The time taken for many tractor-based applications is cut by a double-digit percent-age figure – allowing more land to be farmed in the same time. Fuel consumption and emissions also fall accord-ingly. If you have more than two million people living in a few hundred square kilometers, efficient supply logistics is critical – both for long-distance freight transport and for inner-city distribution. But this logistics tour de force can-not afford to be expensive. The logistics industry every-where is facing pressure to deliver faster, pressure from

The megacity boom

70 percent

23 megacities

2 megacities

of all people will live in cities in 2050 – in 37 megacities and 59 other cities with several million inhabitants.

exist worldwide in 2013.

existed worldwide in 1970: New York and Tokyo.

Megacities are cities with more than 10 million inhabitants.

1900

2050

12

competitors, and pressure to cut costs. ZF transmission systems, like the innovative TraXon automatic transmis-sion system, deliver specific value added for freight for-warders because they reduce fuel consumption and cost less to maintain and service – and, in turn, reduce life-cycle costs. That is good for the customer, good for the for-warder, and good for the environment. And it is not just on the road where logistics run better with ZF technology. ZF supplies complete drive systems for material handling systems that keep operations moving in and outside the warehouse – and is also on hand at the dockside when cargo vessels are unloaded. Thanks to ZF transmis-sions, the vessels also provide reliable service even in atrocious weather conditions. Customization and cost-effectiveness – those are the advantages that also play a role with many municipal services. And that is why ZF

Major construction projects require state-of-the-art technology. Just like Dubai’s Burj Khalifa which was inaugurated in 2010. ZF transmission and chassis technology also played its part.

HoMe of tHe future The construction site is the start of every city.


1514

commercial vehicle transmissions are also used for waste transport, and on cleaning and firefighting vehicles.

Mobile through the city

The bigger the metropolis, the greater the pressure on urban transport. Individual mobility is reaching its limits. At rush hour, the sheer volume of vehicles generates large amounts of exhaust and noise emissions. And yet the traf-fic barely moves. Small vehicles with electric drives will therefore gain ground in urban centers over the long term: They are locally emission-free, quiet to operate, and their limited battery range is perfectly adequate for many urban journeys. ZF has developed an electric drive, which is tailored to future demands in urban traffic while guar-anteeing zero-emission driving pleasure: With its 90 kW electric output and high torque even at low engine speeds, the electric drive, which is placed centrally on the axle, can accelerate just as fast as a powerful combustion engine.

Until this drive format gains widespread acceptance, our remit is clearly to optimize and make the classic driveline more efficient, or make savings through a combination of combustion engine and electric drive. Nonetheless, a traffic jam with whisper-quiet, zero-emission cars is still a traffic jam – is how Bill Ford, Executive Chairman of the Ford Motor Company, so aptly put it during his presenta-tion. Greater vehicle-to-vehicle networking and intelligent traffic management systems could ensure that e-mobility moved forward with far greater ease in the metropolis of the future. Efficient public transport as an alternative to individual mobility will, however, also play a crucial role, including solutions such as the Bus Rapid Transit system. The system can be implemented economically and effi-ciently by integrating ZF technology in the buses: Low-floor axles for rapid boarding and alighting, which work without having to build raised platform stops, and fuel-efficient, low-noise ZF-EcoLife transmissions combined

Mobility as tradeMark People are always on the move in big cities – going to work, going shopping, going to visit each other. BRTRapid Transit

In a deserted city, buses would probably not be the fastest means of transportation, but they are in a metropolis with millions of inhabitants. The under-lying concept is called Bus Rapid Transit (BRT). And this transportation solution can be implemented very cost-effectively with ZF products.


1716

with high acceleration between the bus stops. When it comes to fuel con-sumption per passenger, the bus is the most effi-cient mode of passenger transport. And also the most flexible since bus routes require minimal infrastructure – such as rails or power lines. They can be set up and moved quickly. Mobility – it is a key feature of any city. The pulsating life that charac-terizes any metropolis is based on people’s ability to move around their city with ease.

tHe ultiMate in efficiency The bus is the most efficient mode of public transport in terms of fuel consumption per passenger.

stresses induced in the driveline due to BRT opera-tion, with its constant cycle of acceleration and braking. EcoLife not only performs this task reliably with little maintenance, but also gen-erates minimal noise and emissions. The EcoLife consumes 10 percent less fuel than ZF’s existing BRT classic Ecomat, thanks to its topography-dependent transmission control unit TopoDyn Life. TopoDyn Life always maintains the engine in the most econom-ical speed range.

ZF products therefore play a central role in delivering a highly economical variant of the BRT concept: Low-floor buses ensure rapid boarding and exiting thanks to their design and require no costly modifications at the bus stops. All of which is one advantage for major cities looking to utilize BRT lines as cost-effectively and as flexibly as possible. Speed is also a key factor when planning and setting up BRT since bus stops can be relo-cated quickly. A BRT net-work will need to be rapid,

convenient, and flexible before residents come to accept it as a compelling al-ternative to their own cars.

Time is of the essence with BRT – all passengers have to board and exit at the stop in just 25 seconds. The bus accelerates again – flying past the congested traffic as it speeds along its own dedi-cated lane. Anything that could slow down boarding has been removed: The pas-sengers already bought their tickets before entering the bus stop area; there are no steps to negotiate as they get on the bus. What runs so smoothly in many of the world’s capitals – including Beijing, Taipei, Istanbul, Santiago de Chile, and Cape Town – is BRT made by ZF: Low-floor axles enable pas-sengers to board at street level, providing rapid ac-cess along the center aisle of the bus with no plat-forms or steps to impede passenger flow. ZF already has a volume-production solution for electrically powered buses in the shape of the AVE 130 electric por-tal axle, which is also suit-able for low-floor buses.

For buses with combustion engines, ZF-EcoLife trans-missions are ideal for the

RAPID AND EFFICIENT: BRT with low-floor technology

18

16

14

12

10

8

6

4

2

Bus stops 1 2 3 4 5 6 7 8 9 10

Min

utes

Low-floor technology increases the average speed in city bus transportation. It cuts the time spent at bus stops by half. With stopping times of two minutes for high-floor buses, low-floor technology becomes an increasingly compelling proposition, the more bus stops there are.

Without low-floor technology

Withlow-floor technology


1918

Change is the common denominator in our globally networked world. It affects people and the society in which they live: In Europe the proportion of older people is growing; elsewhere in the world, young people are flooding the labor market. The way in which people live together is becoming more diversified and varied, and the way in which they work together is changing – also at ZF.

Benefit from Differences

diVersity People of different ages, with their own values, and varied cultural backgrounds working together.


2120

40 m.Graduates urGently wanted A McKinsey study estimates that the labor market will need around 40 million graduates to make up the labor-market shortfall as early as 2020.

Demographic change is varied – and requires a multitude of answers from business.

A feature of modern compa-nies: Personal and professional interests can be reconciled more effectively.

There is the statistical evidence first of all: The proportion of older people is rising. In many countries, especially in Europe, this is either already apparent – or is easy to work out. The key concept “demographic change” refers to a global trend which will have a massive impact on con-sumer behavior and the world of work. Germany can be seen as a “forerunner” in this respect, with a birth rate that has been falling for years while average life expec-tancy consistently rises. In 2050 around 38 percent of the German population will be over 60, compared with just 21 percent in 2010. Elsewhere too, like in Japan, this trend is already noticeable: Just under a quarter of the population is over 65 in Japan – and rising. And countries like China will follow suit, albeit with a time lag, bringing enormous repercussions in its wake. At first sight you might assume that the challenge facing business was essentially to structure part of the labor market with age in mind – say through additional automation or ergonomics concepts in production –, to promote knowledge transfer from experienced, older staff to younger staff, and to de-velop a compelling image as an employer to attract appli-cants and prospective new recruits. ZF has already put these ideas into practice.

The culture change prism

But it is not enough, especially not for a business that is growing globally. Not least because changing values and social shifts do not have the same effect everywhere. A business that is expanding needs to align itself to local demo graphics and be flexible enough to find the right answer to the problem. Take Germany for instance, which is particularly affected by an aging population. Here the

statistics show that the proportion of well-qualified single parents in the population is increasing. They are becom-ing a sought-after target group for those businesses look-ing for highly trained staff. But single parents in particular are looking for specific employment conditions because they have to reconcile the needs of work and family – this includes not just childcare provision, but also suitable working time models, management guidelines, team struc-tures. These are the same conditions that would enable the proportion of women in management positions to be increased over the long term, a stated social target in many countries, and a target ZF also intends to achieve as part of its corporate strategy.

Young university graduates provide another example of where demographic change would seem irrelevant on the surface. The current generation looks at prospective employers differently than their peers from the last 20 years. Flexible working time models and flat hierarchies appeal to them, along with clear, transparent career prospects. Why should not a young university graduate at the Friedrichs-hafen location in Germany be in the gym between one and four or do a few lengths in the pool, then return to

the office and make up their early leisure time after seven? Such an arrangement even works to the company’s advantage given the global networking of ZF engineering; for example, the graduate could work more intensely and longer with engineers in Detroit, USA, and Sorocaba, Brazil, despite the time difference. And why should we not establish clear career components – and define transpar-ent criteria for career progression? With this approach, international management expertise and experience will be the norm for occupying certain management positions at ZF. A third example comes from South Carolina in the United States. Here ZF encountered a large number of young and motivated people as potential employees for its Gray Court transmission production location. Many of

sHare and excHanGe expertise internationally ZF bolsters training and knowledge transfer throughout the company.


2322

them, however, lacked the technical skills to understand the complex production processes straightaway and oper-ate the state-of-the-art machinery. On-the-job training provides the ideal solution here for ZF – just as it does at locations in Brazil – allowing it to set up production loca-tions successfully despite the differing standards of public education in many countries around the globe.

There are no easy solutions

The above three examples demonstrate just how difficult it is for a business to adapt to changing values and demo-graphics globally. Demographics are not an issue that can be tackled easily either. It takes more than just a strategy paper from the human resources manager to sort it out. Demographic change places demands on the entire orga-nization. The basic idea is to safeguard future ZF business in a fiercely competitive environment. ZF’s response to demographic changes therefore entails a management task that is integrated throughout all functional areas. This not only ensures that every decision the Group takes also considers demographic factors – irrespective of whether that decision is made by a Board member, plant planner, human resources manager, development engi-

neer, or logistics specialist. That sounds complicated, but can become a competitive advantage. Since the phenome-non of an aging working population will be on the agenda in many countries sooner or later, those companies that build the necessary flexibility into their structures most effectively will be at an advantage.

“Demographics-proof” development

And that naturally has an impact on the product portfolio at ZF. After all, the automotive market has long been affected by changing values and demographic changes: Studies demonstrate that young people – especially in urban centers – are increasingly leasing rather than buying cars. And yet values such as driving pleasure and dynamics continue to be relevant. That is why ZF developers are also looking at the future issue of which technology is highly compelling for fleet owners, how vehicles can be increasingly individualized using innovative driveline and chassis technology. ZF technology is certainly in line with one trend: Research shows that also older drivers are inter ested in driver assistance systems, automatic trans-missions, or adaptive suspensions, i.e. in many product areas where ZF boasts many years of experience.

Working together, learning from each other

The example of Brazil shows that even somebody with a school leaving certificate under their belt still needs more training before they can work for a multinational company. Multinationals attach a great deal of importance to foreign language skills, communica-tion skills, and managerial style for their staff – especially executive managers. For this reason, the HR managers from ZF South America set up the “Uni ZF” program in 2005. It teaches company employees technical and management skills. External partners and internal multipliers pass on general and ZF-specific expertise to new employees. ZF em-ployees have completed around one million hours of training to date, with more than 200 multipliers volunteering their time in Sorocaba and São Bernardo. The program has been so successful that ZF suppliers and ZF Services partners in Brazil have also intro-duced the program in a modified form.

The ZF in-house training initiative in Brazil – as at other ZF locations worldwide – is supported by specific partnerships with educational institutions. Cooperation with the Colegio Humboldt, a German school in São Paulo, will help ensure ZF has access to enough highly qualified applicants for sales and administrative posts. Collaboration with the FACENS (Faculdade de Engenharia de Sorocaba) aims to provide a good supply of young engineers – just two examples among many.

traininG our own staff As part of the “Uni ZF” program, ZF experts from Brazil also pass on technical and management skills to new colleagues.

Workforce over 55 (in %) Situation 2010 and forecast 2030

2030

2010

2030

2010

China

Industrialized nations*

2030

2010

Worldwide22

18

27

14

15

* 25 countries from Europe, North America, Asia Source: McKinsey Global Institute, 2012

The percentage of older employees is growing worldwide

31

2524

Environment, Climate, and Resources

1Act rather than argue

How can we assume responsibility today for tomorrow’s world? It is a question lots of people are asking as they address issues such as environmental and climate protection or resource conservation. Technology groups like ZF also have to state where they stand: three brief statements on a complex topic.


Statutory CO2 limit values in the markets

CO2

ZF does not get tied up in the argument about whether and to what extent man is responsible for global climate change. Simply the opportunity and existing indicators, as well as tighter international statutory regulations have prompted the Group to fulfill its responsibility and play its part in reducing fuel consumption and, in turn, CO2 emissions.

Source: German Association of the Automotive Industry (VDA)

United States EU China Japan Korea

100

125

150

175

200

Gra

ms

of C

O2

per

kilo

met

er

2025

2021

2016–26 %

–52 %

2020

2015–22 %

2020

2015–25 %

2020

2015–12 %

2015–32 %

–38 %

–40 %

–30 %

Current limit value

Valid from 2015 (USA: from 2016)

Assumptions through 2020/2021

Assumptions through 2025

212 g/km

154 g/km

~200 g/km

166 g/km

204 g/km

2726


2Economical use of all resources

The ZF Group recognizes that its products consume resources – both during manufacture and usage. But the company is doing everything to minimize energy consumption wherever possible: ZF products already stand out from the competition by virtue of this responsible use of resources. ZF continues to drive down energy consumption for production, too.

ZF’s sustainability principles aim to reconcile climate protection and economically profitable growth.

WindThe Invisible Hand

Many businesses are endorsing a new energy mix and are looking to give greater priority to renewable energy sources. Very few of them have the expertise to support reliable electricity production using wind power. ZF does though. And has been putting that expertise to good use since 2010.

2928


3Pragmatic solutions

and new ideas

ZF endorses and advocates pragmatic approaches to climate protection and resource conservation: Immediate notable savings can achieve more for the environment than the prospect of technology change in the distant future. That is why ZF is now focusing on making the conventional driveline more efficient.

ZF supports this approach with its commitment to electromobility, lightweight construction technology, and renewable energy generation using wind power.

powerIn his book “The Wealth of Nations”, Scottish econo-mist Adam Smith, one of the pioneers of economic liberalism, introduced the notion of the “invisible hand”. Taking trade restric-tions as an example, he illustrates how the efforts of individual economic players to gain maximum benefit ultimately serve the com-mon good – as if their ac-tions were driven by an “in-visible hand”.

If you were looking for proof of the existence of said theory in today’s econ-omy, ZF’s involvement in wind power would be a case in point. In 2010, the Group announced its inten-tion to begin manufacturing wind turbine gearboxes, and, to do so, acquired Han-sen Transmissions, a wind turbine gearbox manufac-turer, shortly afterwards. This decision was not driven primarily by its com-mitment to the environment and renewable energy sources. The decisive factor was the prospect of the wind power industry as a long-term, sustainable – al-beit volatile – market which would make ZF less vulner-able to the economic vaga-ries of the automotive in-dustry. Others are also reap-ing the benefits of the wind turbine gearboxes, whose dimensions and weight

dwarf even the heaviest ZF commercial vehicle trans-missions to date. Beneficia-ries include wind turbine manufacturers, who will also get transmission solu-tions from an independent vendor in future thanks to the ZF portfolio. Or wind turbine operators looking to minimize maintenance and operating costs. And ulti-mately many energy con-sumers that are switching to renewable energy sources. All because the automotive supplier ZF, hitherto with a clear product focus on driveline and chassis tech-nology for mobility applica-tions, has something to of-fer for wind power. Starting with the gear designs and materials expertise, calcula-tion and simulation, right through to quality stan-dards in production.

ZF’s expertise in servicing and testing is also required for wind power. Much of this expertise has already been incorporated in the development and produc-tion of ZF wind turbine gearboxes, such as im-proved efficiency, more re-liable planetary bearings, and a maintenance-friendly design. ZF’s annual produc-tion of wind turbine gear-boxes generates an output of 10 000 megawatts – equivalent to the rated out-put of 14 medium-sized nu-

clear power stations. ZF operates four state-of-the-art production facilities for wind turbine gearboxes in Belgium, India, China, and the United States, as well as sales and service outlets around the globe. Wherever you look, the “invisible hand” contin-ues to play its part.

reliable power source: ZF transmissions have to complete up to 175 000 hours of continuous operation in wind turbines.

20 years

3130


Minimum input – maximum output: efficiency in a nutshell. We all have to learn to make our limited natural resources go farther. And not just so we will still find a parking space in future, like the ones here in the Environmental Nature Center Building in Newport Beach, California, USA. But to ensure that future generations will have a sustainable future. Vehicles with ZF technology use energy and raw materials economically and deliver exceptional customer value ex factory.

IMPROVEEFFICIENCY

PERMANENTLY


32

Buying Time for New SolutionsResources have always been scarce. Now though we face the prospect of their being exhausted soon. The fortunes of many individuals and industries once depended on the sperm whale until it was hunted to the verge of extinction. Then things took a radical turn. We attempt to learn from a chapter in our industrial history.

The material was called spermaceti and was a valuable commodity at the start of the 19th century. The oily substance was obtained from flensed sperm whales and was used as lubricants for machines or to make candles, which burned with a very bright flame with almost no smoke. The demand for both rose sharply after 1820 – and that was precisely why the next 50 years went down in many of the world’s nations as the Golden Age of whaling. But there was no unlimited supply of this natural resource. Around 1851, the year the novel Moby-Dick was first published – arguably the most famous book on whaling –, the stocks had already been decimated: Around 750 whalers in the Atlantic and Pacific were out at sea hunting whales for several months at a time, soon leaving the species very little chance of recovering and breeding. One fear was becoming

1820 to the end of the 19th century Spermaceti End of the 19th century to the present Petroleum

Petroleum was primarily a fuel for oil lamps before being used as a lubricant.

The sperm whale uses the white, waxy substance in its head to help it dive. It was, however, also used as a lubricant in the early days of industrialization.


3534

Heating gases

Gasoline

Diesel

Fuel oil

Kerosene

Heavy fuel oil

* Various mineral-oil products are made in the refinery,

including naphtha which is important for the

chemical industry. Naphtha provides the basis for many

other products.

SubStitute wanted How can energy demand be met with dwindling fossil energy sources?

21st century New energy sources

commonplace, the industrial revolution, which was gain-ing momentum with its steam engines, powered looms, and spinning machines, might find it had run out of lubricant.

Yet before the supply of candle wax and lubricants dried up, attention turned to a little-known substance called rock oil. Rock oil gushed from the ground in various regions of the United States and Canada. Research chemists soon discovered how they could manufacture fuel for lamps and industrial oils from the petroleum (the Latin transla-tion of rock oil). Of course it would take a while before the manufacturing processes were firmly established – meantime whaling and the use of petroleum ran side by side for several years. But only petroleum could meet the sharp increase in demand in the latter part of the 19th

century. The chemical industry has been producing kero-sene (for lamps) and industrial lubricants ever since – and now relies on petroleum production. Fortunately, whaling decreased sharply. Environmentalists in particular called for an outright moratorium on whaling, which was largely adopted in 1964. At the time, it was inconceivable that the shortage of fuel for lamps and lubricants had prompted the petroleum era. Electricity provided lighting, with oil-fired power plants playing just a minor role in power generation. The production of lubricants was a chemical specialty, which was based on petroleum but was only responsible for a fraction of the quantity involved. Petroleum had already become the primary fuel for mass mobility by the mid-1960s, finding its way into the fuel tanks of a grow-ing fleet of passenger cars and commercial vehicles. Today

petroleum is itself a resource that is becoming increasingly scarce. Global petroleum reserves are difficult to estimate. However, there is no doubt that this raw material will not be economically workable in the foreseeable future, despite reports of recent discoveries of oil reserves.

What will be next? The answer is banal: the future. Either in the form of an energy source that meets our needs. Or which prompts us to rethink and alter our energy consump-tion. Or an entirely new possibility that opens up new markets and industries. Until then though we will have to use the finite resource of petroleum as responsibly as possible, by not wasting a single drop. And we need to look into how mobility and transportation will be viable in future using alternative energy sources.

The fraction from crude oil naphtha is by far the most important raw material for the chemical industry. In our opinion, it is too much of a waste to simply burn it.”

“

Dr. Utz Tillmann, Director Gen-eral of the German Chemical Industry Association (VCI)

Pesticides Fertilizers

Intermediates for pharmaceuticals Paints

Plastics Electrical insulating materials Preforms and foams for the

packaging and construction industry Detergents and cleaning agents Synthetic rubber (car tires) Soft and rigid upholstery foams Impact-resistant plastics Acrylic fibers Plastic films

Solvents Bottles

Bitumen

A valuable resource – petroleum Crude oil by-products *

97 percentof all fossil raw materials (petroleum, natural gas, coal) are burned to generate energy.

Only 3 percentof fossil raw materials are used by the chemical industry to manufacture products.

37

using efficient technology, sensible alternatives, and an intelligent combination of various modes of transport.

Waiting for the revolution?

The best solution would be smaller, lighter vehicles with a (not just locally) zero-emission electric or fuel-cell drive. They would be networked with each other, have informa-tion on connections to other modes of transport, and would know precisely where the congestion was. In short, they would regulate the flow of traffic automatically – a fleet of passenger cars with “swarm intelligence”. Yet this new technology is still some way down the road as it requires a phenomenal amount of groundwork, including rolling out a universal electricity supply based on renewable energy sources. Electromobility would barely cut overall emis-sions given the current electricity mix. It also requires groundwork in technological innovations, such as viable, efficient storage technology, lighter vehicle concepts, and comfortable electric drives. ZF is also involved in all these areas. And until everything is in place, will we have to “wait for the maximum solution”? ZF does not think so. ZF products for passenger cars are already delivering energy efficiency, right here and now. People are buying cars –

36

The world is in motion – on four wheels too. An increasing number of people, especially in the emerging industrial-ized nations, can now afford a car of their own. And this newfound prosperity is driving a global automotive boom while also increasing global fuel consumption and emis-sions. Gridlock is becoming a daily challenge in many major cities. A new form of individual mobility is required –

Deliver maximum results with minimal resources – this aspiration is central to product development at ZF. ZF technology ensures efficiency in many places: from the passenger car to the city bus, from the construction vehicle to the tractor.

Technology with Turbo Efficiency

beinG MObiLe means for many people: being motorized. World-wide, there are over one billion vehicles on the road – and rising.



3938

buying the technology they believe to be best on the market today. Over the next few years, that technology will continue to be vehicles with a combustion engine – however optimistic you are about the progress being made with electromobility. The potential reduction in fuel consump-tion and emissions with gasoline and diesel engines will have an enormous impact worldwide. When it comes to resource conservation and environmental protection, opti-mizing the combustion engine driveline will, for some time, continue to be a far more efficient option than electrifying individual mobility.

Key position in the driveline

Use energy efficiently to save resources – an approach that ZF already adopts in all its vehicle segments. After all, ZF technology is located at a crucial point: Transmis-sions and axle drives have a major influence on the energy consumption in the entire driveline, be it in a passenger car or a truck, in a construction or agricultural vehicle. ZF automatic transmission systems always maintain an engine speed range that promotes low fuel consumption while generating minimal drag losses. Moreover, the seemingly unremarkable ZF products such as clutches, dual mass

When it comes to resource conser-vation and climate protection, optimiz-ing the combustion engine driveline will, for some time, continue to offer greater potential than electrifying individual mobility.

... the 65 million or so new passenger cars that are registered worldwide every year were 5 percent more energy-efficient? Then these cars would pro-duce over 5.8 million tons of CO2 less every year. If you were looking to achieve the same effect by using electric vehicles, you would have to replace 3.25 million vehicles powered by a combustion engine with pure electric vehicles. That is not feasible over the short term.

3.5 millionElectric vehicles

– 5 percentEnergy consumption

or

What if …

– 5.8 million tCO2

Savings

– 5.8 million tCO2

Savings

TraXThe new TraXon automatic transmission system brings a range of functions to the market that are unprecedented in the truck driveline. Yet to describe it as “futuristic” would be misleading, because many of the special features can already be used.

Science Fiction Turns Science Fact


4140

flywheels, and torque converters consume less power, thus paving the way for more economical engines. End customers would otherwise reject many of these downsiz-ing engines given their design-related shortcomings, such as pronounced torsional vibrations. ZF technology plays a key role in substantially reducing uncomfortable knock-on effects such as noise and vibration.

Two highlights from the passenger car segment attest to the considerable overall impact of efficient ZF technology: The 8HP 8-speed automatic transmission has been a prime example of economy and resource conservation since it was launched in 2008. Compared with its six-speed pre-decessor, the entry-level version already reduces fuel con-sumption and, in turn, emissions by six percent – and by as much as eleven percent if the optional automatic start-stop system is specified. In 2012, ZF produced 1.6 million 8HP transmissions – an important part of the 2.5 million passenger car transmissions that ZF manufactured during the course of the year. Production will also get underway in the United States in 2013. The high demand can also be attributed to other product advantages: Drivers are equally enthralled by its dynamic handling qualities – such as the barely perceptible gearshifts in milliseconds, and the optimal drive. Power on demand – which ensures energy is only consumed as and when required. The electric power steering system from ZF Lenksysteme** also sets standards thanks to this concept. While conventional power steering systems constantly need energy for the hydraulics, Servo-lectric only consumes energy when the driver steers. And since the steering is not used very often on an average trip, this concept saves around 0.4 liters (0.1 gallons) of fuel per 100 kilometers (62 miles). A small figure which really does add up – the 27 million vehicles sold to date with Servolectric produce approximately 2.6 million tons less CO2 annually. Control electronics now play a major role in fuel efficiency. Cars have long since been computers on wheels, considering the huge amounts of data sent back and forth in the vehicle as it moves. ZF systems such as transmissions or steering systems account for a large part

** ZF Lenksysteme GmbH is a joint venture of ZF Friedrichshafen AG and Robert Bosch GmbH.

LOweR eMiSSiOnS The 27 million vehicles with Servolectric sold through the end of 2012 have cut CO2 emissions by 2.6 million tons annually.*

2.6 m.Servolectric

* with an annual mileage of 10 000 km, average consumption of 7.7 l/100 km, and NEDC

on

Hybrid for heavy trucks? A dual clutch transmission which shifts gears with no tractive force interruption on commercial vehicles? An anticipatory transmis-sion control unit that fac-

tors in uphill and downhill sections? The answers to all these questions would have been a resounding no. Until ZF unveiled its TraXon automatic transmis-sion system in 2012.

The modular design of the transmission system ensures that the system will continue to cut a fine figure among the competition for many years to come – when heavy trucks will look slightly different to what we are accustomed to today. Yet the advantages of the TraXon transmission system are already a compelling proposition for today’s truck models: The basic transmission with 12 or 16 gears respectively transmits well over 3 000 Nm of tor-que and, thanks to its high transmission gear spread, new gearset concept, com-pact design, greater strength, maneuverability, and its quieter operation, al-ready sets the benchmark among automatic trans-mission systems.

One unique selling propo-sition is the optional star-ting modules for the basic transmission: The standard dry clutch can be designed for smaller heavy goods vehicles as a sturdy twin plate clutch. Furthermore, TraXon in its TraXon Hybrid guise also offers a

hybrid module which reco-vers braking energy and feeds it back into the drive-line via a 120 kW electric motor. TraXon Dual is ideal for truck manufactu-rers and freight forwarders because the dual-clutch module can perform cer-tain gear changes without tractive force interrup-tion – thus paving the way for very long rear axle ra-tios. These ratios reduce the engine speed and, in turn, fuel consumption. All heavy goods vehicles, which have to maneuver precisely with very high input torque, stand to bene fit from TraXon Torque. An engine-depen-dent PTO drives additional units in purpose-built vehi-cles, such as concrete or fire pumps. The powerful ZF Intarder is of course also available with TraXon. ZF engineers have substan-tially improved the trans-mission control system with PreVision. Thanks to GPS data access, the shift strategy is able to take rele-vant terrain and route in-formation into account as part of gear selection.

FEWER FILL-UPS Commercial vehicles save fuel with the TraXon automatic transmission system.

TraXon*

Source: ZF; stated savings compared with manual transmission, dependent on individual application, engine map, and axle efficiencyIn conjunction with long rear axle ratio.

less6 – 9 % less

8 –11 % less11 –14 %

TraXon + TraXon Dual*

TraXon + TraXon Hybrid*

*


4342

provide better fuel consumption and emissions figures. While automakers looking to trim weight are putting the unitized steel body and traditional wiring, and jointing materials on the test bench, ZF is demonstrating the light-weight construction potential in the suspension. In addition to component optimization and weight-saving function integration, ZF is also embracing alternative materials, such as the concept of a wheel-guiding transverse leaf spring made of fiberglass. Another example is the ultralight brake pedal made of fiber-reinforced composite, which weighs half as much as the comparable steel design. Lightweight construction also pays off in commercial vehicles: ZF’s twin rear axle suspension is 40 percent lighter, with direct benefits in terms of payload.

Production in sights

A car has to apply its hp or kW on the road: A company like ZF has to do the same with its new technology – in this case on the production line. Lightweight construction in particular will only be able to play to its strengths if it can be mass-produced, i.e. manufactured in large quanti-ties with high quality. Relevant expertise first needs to be developed with many materials. ZF is a pioneer in this re-spect. With the production of complete axle components made of fiberglass, ZF is garnering testing and production expertise so it can supply products as soon as the demand for lightweight construction products increases generally. One rule always applies: A ZF product needs to be pro-duced and installed before it can deliver optimum fuel ef-ficiency – and thus help protect the environment.

COnSuMPtiOn SaVinGS The power-split continuously vari-able transmission keeps the construction- machinery engine in the most economical engine speed range.

25%cPOWER

of this data. And that is why ZF has massively built up its electronics expertise over the past few years. Economy, comfort, and driving dynamics can only be raised to the next level by ensuring hardware and software work in perfect harmony. Bits and bytes in the car have become the new efficiency catalyst in this process.

Electric and light

At which point does a vehicle become an electric vehicle? When it is powered solely by a battery and electric motor? Or when it receives most of its energy from a powerful battery, but still allows a combustion engine to kick in for longer journeys? Driveline electrification has many facets – one of which are hybrid vehicles that combine the ad-vantages of electric and CE mobility. ZF integrates these advantages in all forms of mobility since becoming the first auto component supplier in Europe to start volume produc-tion of hybrid components for passenger cars in 2008. A ZF hybrid transmission is just as an attractive proposition for a motor yacht as it is for a heavy truck. The engine can be smaller because an electric motor provides additional drive force by recovering braking energy. Such design con-siderations aside, the immediate environment also benefits because the electric motor periodically drives the vehicle. City dwellers are spared the constant din of buses mov-ing off thanks to ZF’s whisper-quiet electric portal axle. And here too, ZF’s products for driveline electrification are cost-effective, practical, and ready for production. Over the past few decades, passenger cars have become increasingly heavier as more and more technical equipment has been added. If the weight spiral can be reversed, this will also

a 25 % ReduCtiOn in fueL COnSuMPtiOn is possible in an ideal scenario with the 8-speed hybrid transmission for passenger cars as a full hybrid system.

25%8HP hybrid

HYbRid at Sea An additional electric motor makes yachts and small motorboats quieter and more economical.

COVeR SHORt diStanCeS in PuRe eLeCtRiC MOde – with a full hybrid transmission from ZF.

A ZF transmission is installed in eVeRY One in

Six COnStRuCtiOn MaCHineS around the globe.


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effiCienCY iS tHe GuidinG PRinCiPLe for the entire Group, not just for its products. It rather lies at the heart of all business processes at ZF.

“Research converts money into knowledge, innovation con-verts knowledge into money”. The quote from the former chemical manager Alfred Oberholz sums up the attitude of many technology companies. Inventions and technological progress must not be an end in themselves, but occur based on economic considerations. These kinds of developments aim to produce a marketable product that will then feed into a company’s success, provided it brings its customers maximum benefits. Good management and an efficiency-

aligned corporate structure with lean processes are neces-sary to ensure a business can manage this innovation cycle.

Group-wide process management

Consider where you can find top-quality management and efficient structures within the ZF Group and you will in-evitably come across the key concept of process manage-ment. This concept encompasses all workflows that can be standardized and also constitutes the key lever for a lean

ZF products are renowned for making mobility and industrial technology more economical. The Group is striving for functionality and expediency – throughout all business processes.

Innovations of Great Value


4746

yet effective enterprise. After all, efficiency must perme-ate an organization as a whole. ZF is heading in the right direction in this respect. The Group monitors, assesses, and optimizes all processes constantly. No easy task in light of ZF’s size, its wide-ranging product portfolio, and global market outlook. Yet accomplishing this task brings enormous advantages: Once an optimum or benchmark is found, this know-how can be transferred with a reason-able use of resources – to other divisions within the Group, to newly emerging international locations, or to additional products within the portfolio. Many examples from the world of ZF are testimony to this approach. For example,

HaRMOniZed, OPtiMiZed PROduCtiOn PROCeSSeS make ZF flexible – particularly where global growth is concerned.

Do it once” – ZF’s golden rule that governs the close collabo-ration between decentralized divisions and cor-porate functions.

“

ElecSuccess Guaranteed

Electronics and software work away quietly in the background. Drivers are often surprised to learn the extent to which bits and bytes now influence their vehicle. ZF laid the groundwork for the digital age a long time ago – with the electronic control unit for instance.


4948

when setting up a new location, as most recently with the passenger car axle plant in Beijing, most of the well-oiled procurement, logistics, and production processes can be rolled out immediately. Nevertheless, adjustments have to be made to meet local conditions at the new location. Harmonized processes also allow the Group to run joint business parks, as in Sorocaba, Brazil, Shenyang in China, or in Gainesville in the United States. Whereas current international business alone might not provide a sufficient workload for a division’s or business unit’s products, the situation looks very different when several divisions/busi-ness units work together. Whenever logistics, quality, and IT processes are identical, it all looks like a single factory from the outside, only that the factory produces commer-cial vehicle transmissions alongside axle drives, or drive-line and chassis components. In conjunction with specific methods, ZF processes can also document quality to the outside, as with wind power. ZF sets itself apart from many competitors in the market for wind turbine gearboxes with its production and quality expertise from the automotive sector, which is embedded in the Group-wide ZF Produc-tion System and the ZF Quality Management System. Group-wide harmonized and optimized processes make ZF more flexible: For example, whenever new business areas need to be integrated or an existing business unit reas-signed; whenever peak workloads in one ZF division need to be offset by utilizing another division’s plant to provide production capacity. Changes to Group or management structures can also be implemented faster. And ultimately higher-ranking objectives can be met across the board, for example, in terms of energy savings and developing a broader efficiency initiative. After all, ZF does not want to be known just for energy-efficient products, but also for

using minimal resources to manufacture them. The prereq-uisite for meeting this objective is a state-of-the-art energy management system. The system began its rollout during the “Year of Energy” campaign in 2012. The plan now is to integrate the system into the ZF process landscape.

Structured spirit of invention

The Group structure is another counterbalance for effi-ciency. The individual divisions – organized according to product lines – combine product-oriented competencies. They are already closely integrated with cross-disciplinary functions at ZF’s Board of Management level to produce a matrix, which is represented in the corporate functions. “Do it once” is the golden rule. This interaction of corpo-rate and divisional functions at all levels prevents duplica-tion of resources. This means that councils coordinate, at an early stage, the various divisional and corporate-func-tion approaches in important competency areas such as Market, Product, Production, Human Resources, Materials Management. If a division already has valuable expertise, it is leveraged on a cross-functional basis as part of shared services concepts or transferred as a benchmark. This can materialize in very different ways. Corporate functions do not always have to be located centrally, such as with IT:

MaKe GROuP-wide SaVinGS By initiating an energy management system, ZF aims to reduce its global energy consumption by one-fifth before 2015.

20%tronicstransmission were also red-uced substantially because the special control software programming provides an alternative to the usual me-chanical multidisk clut-ches – an ideal solution for the transmission’s space-sa-ving design used in the tight installation space of front-transverse-engined vehicles. Electronics do not only play an essential role in the pas-senger car or the transmis-sion: Said control electro-nics can equally be found on a tractor, on a construc-tion machine, a bus, or a truck, and are just as im-portant for suspension and steering as they are for driveline technology.

At present there are some 1 000 software engineers working around the globe in the ZF Group. The figure is rising all the time, with considerable scope remai-ning for the adoption of ac-tive control systems. Moreo-ver, the potential is equally huge, as complex energy management of hybrid and electric vehicles relies pri-marily on the control elec-tronics and the software.

The black boxes that ZF uses to house the control electronics for the new 9-speed automatic transmis-sion do not have to look pretty. Because customers appreciate their inner values without any eye- catching exterior: Electronic components and the soft-ware inside are now re-sponsible for many product qualities. These bits and bytes are also responsible at ZF for reducing fuel consumption with every new generation of transmis-sion that is launched.

Electronics make the ZF products more powerful, more fuel-efficient, more cost-effective, or even more comfortable – and often de-liver on all counts. The con-trol software was a prime reason why ZF managed back in 2006 to use the second-generation 6-speed automatic transmission to demonstrate that passenger car automatic transmissions were more dynamic and more fuel-efficient than manual transmissions. In the case of the 9HP the in-ternal drag losses in the

MORE DATA, MORE FUNCTIONS: The amount of read-only memory (ROM) in ZF transmission control units has increased over the years.

5000

4000

3000

2000

1000

1995 2000 2005 2010 2015

0

Kilo

byt

es

6-speed

8-speed

9-speed

5-speed


5150

Business services can also be based in a ZF division on behalf of the Group. The most recent example is the pur-chasing of production materials where full-time commod-ity managers, who are integrated organizationally at Corporate Headquarters, central departments, and also in the divisions, will in future handle their respective commod-ity group on a global, Group-wide basis, according to the principle of “one person buys for everyone.” Hence com-petencies and volumes can be bundled and cost savings made, with every division and their business units reap-ing the benefits. The innovation process, at the heart of a technology-driven Group like ZF, also reflects this organizational versatility. Experts from throughout the Group identify the future technology areas that will be im-portant to ZF. The Group distills a roadmap based on these

enGineeRinG inVOLVeS MuLtiPLe faCetS In addition to product development, ZF is also investing in basic research.

decisions. This system provides sufficient leeway for all the key elements in a technology Group’s future. Product enhancements or innovative new products – such as the electric central drive for purely electrically driven passenger cars. Critical groundwork is also always integrated in the roadmap, such as research on the use of fiber-reinforced composites as lightweight construction materials. This last example clearly illustrates that the ZF innovation process is uniformly aligned and encompasses all facets of a tech-nology: Production and process-engineering issues play a role in this respect since resolving these issues will enhance ZF’s production know-how. But just as important are the tools and testing processes which make development more efficient, along with a uniform sales and marketing planning system. The issue of cost engineering is also extremely important to ZF, i.e. meeting cost targets through-out the entire product evolution process. To this end, ZF has launched a multidisciplinary project that harmonizes target costing methods and IT systems company-wide. Top management is involved in the process so that corporate, entrepreneurial strategy decisions – such as acquisitions or diversification into new product categories – can be made promptly to support the business. ZF engineers’ creativity and commitment are equally important elements: 900 invention disclosures and over 600 patent applications every year speak for themselves.

The ZF divisions are responsible for the specific product strategy and associated development. They have access to insights garnered from the roadmap and can seek assistance from the development network. Sustainability is not simply another development target for ZF, but lies at the heart of everything the company does to make its own products better, more economical, and environmentally friendlier through intelligence – or, to quote Alfred Ober-holz, to convert knowledge into money.

Already incorpo-rated in a roadmap today: ZF’s market-able innovations of tomorrow!

Every year ZF employees contribute to the company’s innovativeness with 900 inVentiOn aPPLiCatiOnS.

900

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International success does not just happen on its own. It requires a plan, which, in turn, requires customers and suppliers as strong partners. That is how ZF has managed over the past few decades to successfully market its products and services in many countries around the globe: with a clear growth strategy, by partnering with its suppliers, and through systematic customer orientation. Now ZF has a global footprint – a clear sign of its global success. And, at the same time, a prerequi-site for many other opportunities.

LEVERAGE OPPORTUNITIES

JOINTLY

5554


What are the most important issues and skills for the next generation of managers? A daily newspaper asked academ-ics teaching at internationally renowned business schools the same question in 2011: Their answers ranked market-ing and strategy at one and two as the most important man-agement disciplines. Internationalization was only ranked third. If we were to repeat the survey today, international-ization would presumably no longer figure as a separate category – because it has to be an integral part of all the other disciplines. After all, many of today’s business lead-ers can only utilize marketing and strategy expertise if it is linked with a global outlook. Internationalization is now simply taken for granted in business. And it is not only the company’s chances of success that have grown exponen-tially thanks to global market and production integration; competitive pressure has also increased. The trend began in the 1980s with the gradual removal of border and tariff barriers and the consistent reduction in communications and transport costs. Export trade is a classic symptom of strong international economic integration: According to UN statistics, the volume of international goods trade has grown 250 times over the past 60 years, from US $ 62 billion in 1950 to US $ 15 230 billion in 2010.

Yet the cross-border dependencies of the global economy are not just visible in terms of trade. Foreign direct investment is also increasing, i.e. those financial resources that com-panies raise in one country to invest them in the economic output in another country – say by setting up subsidiaries, joint ventures, participations in or loans to local partners. If European companies operate locations in China or Brazil, the bulk of the goods produced there are not even exported

Successful German businesses have undergone a transformation over the past few decades: They have now become successful, global companies. ZF too – as reflected in its key performance indicators. Yet the drive toward internationalization is in ZF’s DNA.

Across Borders × 250

Compared with 1950, the international volume of trade in 2010 is 250 times higher.

Globalization at ZF started back in 1958 – long before free trade.

the worLd iS GrowiNG toGether International shipping terminals, like this one in Hamburg, are doing their part.

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iNdiCator of GLobaL buSiNeSS Foreign direct investment also flows from the emerging markets to the industrialized nations.

Foreign direct investments (Outflow)

– but sold in the country itself. Seen globally, direct investment grew from US $ 14 billion in 1970, US $ 241 billion in 1990, to US $ 2 198 billion in 2007.

Leverage opportunities – around the globe

Leveraging opportunities outside the domestic market – this has always been ZF’s objective when setting up in-ternational locations. This was the case long before the term globalization was coined: In 1958, ZF set up its first production location outside Germany in São Caetano do Sul in the province of São Paulo, Brazil, in order to manufacture, among other things, the DKW driveline components produced under license in Brazil. ZF’s presence in the country paid off just a few years later when German commercial vehicle manufacturers set up production in Brazil in the mid-1960s and were looking for a local supplier for drive-line technology. The ZF product portfolio was also gradu-ally extended in Brazil to include technology for passenger cars and trucks, agricultural machinery, and marine trans-missions. Even now, South America, with the core country

Brazil, is one of the key market regions for the Group. ZF generates 4 percent of its sales in the region. And even today the Group’s ability to offer production and technology expertise locally constitutes an important competitive advantage – such as when global automakers are looking for a components supplier to partner with them worldwide.

In the Asia-Pacific region, which is currently the most dynamic market region globally, ZF was also a trailblazer at a time when very few had predicted the region’s current economic importance. In 1980, ZF signed a deal with the Beijing Public Transport Corporation (BPTC) to supply bus

transmissions. The German Group initially licensed trans-mission production before setting up its own production locations and joint ventures in China. ZF products and pro-duction capacity helped support the many international car, truck and construction machinery producers that moved into China in the late 90s – along with domestic Chi-nese businesses conquering those export markets where ZF still has no presence, by leveraging high-quality ZF drive-line products. ZF has always used production under license in order to boost its position in markets without (initially) setting up its own production capacity. For example, cur-rently in the United States, production under license of

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

2 500

2 000

1 500

1 000

500

U.S

. dol

lars

(b

illio

n)

Industrialized nations

Newly industrialized countries

Source: United Nations Conference on Trade and Development (UNCTAD)

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8- and 9-speed automatic transmissions is starting up with the customer Chrysler – in parallel to the production launch for 8- and 9-speed automatic transmissions at the new ZF location in Gray Court, South Carolina.

Think globally – act locally

With 121 production companies in 26 countries and 43 percent of sales coming from outside Europe, ZF has long since been a global player – or better still: A global player that acts locally on all continents. Because the Group has its “ear” close to the markets, it can therefore react rapidly and flexibly to new developments. This is also reflected in ZF’s organizational structure; international expansion, which is

making ZF less reliant on its core European market, forms an integral part of the corporate strategy: Over the next few years sales from outside Europe will exceed 50 percent. The markets in Asia and in North and South America will continue to become more important for ZF – this will be reflected not only in the business operations and sales figures, but also in the development of local expertise.

Multipliers of success

ZF’s servicing activities also have a strong global focus: Radiating out from the ZF Services headquarters in Schweinfurt, 32 international service companies operate with 77 locations. Added to this is a network of 650 service

part ners worldwide. Thus, ZF can guarantee qualified services in more than 100 countries around the globe – repair and maintenance work on the ZF products in driveline and chassis technology including the provision of necessary spare parts for workshops and fleet operators. In the global aftermarket business, ZF Services offers a broad portfolio of spare parts for virtually all vehicle brands – thanks to highly efficient logistics and state-of-the-art central warehouses. One advantage for the OEM business is the global service presence, because rapid availability of qualified services is important for end customers in the grueling everyday environment of logistics and transport.

ZF not only benefits from increasing internationalization; the Group also keeps internationalization moving or drives it forward with its products. Because ZF technology – in container ships, in forklift trucks, in heavy trucks and dis-tribution vans – makes efficient logistics possible in the first place.

Key performance indicators of a global player: ZF generated 57 percent of its sales in Europe, 23 percent in North and South America, and 18 percent in the Asia-Pacific market region in 2012.

QuaLity kNowS No bouNdS At its locations worldwide, ZF manufac-tures products according to the same high standards as in Germany.

maiNStay of Zf buSiNeSS International service hubs like here in Singapore.

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The address is 2846 North Old Laurens Road, Gray Court, USA. Under a glori-ously blue sky, the four flags of ZF, South Carolina,

In the U.S. State of South Carolina, a new ZF plant for automatic transmissions is taking shape on the proverbial greenfield site. From here the Group will supply its customers with highly efficient 8-speed and 9-speed transmissions for passenger cars starting in summer 2013.

Success in the Team

Federal Republic of Ger-many, and the United States of America flutter in the gentle breeze on this sunny January morning. Even though today is a public holiday – Martin Luther King Day – the parking lot is full of cars. Here outside you are blissfully unaware of any of the work that has been going on inside the huge gleaming silver-gray production complex for the past year. Welcome to ZF Transmissions Gray Court. Some 130 kilometers north-west of South Carolina’s capital Columbia, the new passenger car transmission plant run by the ZF Group is taking shape on the Amer-ican continent. The good 15-minute walk around the production facility block brings home just how big

90 000 square meters actu-ally are. ZF will be produc-ing the tried-and-trusted 8-speed automatic trans-mission (8HP70) and the all-new 9-speed automatic transmission (9HP48) for front-transverse mounted engines starting in summer 2013 at this site. In the plant’s first expansion stage, around 1 200 employees will manufacture around 800 000 transmissions a year.

Aim: more efficiency

The transmission plant is undoubtedly impressive testimony to the company’s commitment to the U.S. automotive market and to its people. The name Gray Court is, however, also syn-onymous with cutting-edge, highly efficient driveline technology – made by ZF.

No time for romaNtiCiSm While the sun sets outside, inside the installation work goes on.

aGaiNSt the CLoCk Many hands ensure that production will start in summer.

QuaLity of Life The Gray Court plant is located next to the cozy small town of Greenville in South Carolina.

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a pLaNt iS borN The production and assembly plant grows by the day.

This technology is now also helping Chrysler, the first U.S. automaker, to notice-ably reduce the fuel con-sumption and CO2 emis-sions of its vehicle fleet. Admittedly, ZF already has ample experience in setting up international production facilities, with more than 121 production locations worldwide to its name; nonetheless, Gray Court is something special. In re-cord time the greenfield site will be transformed into a new plant for an all-new high-tech product (9HP) with a new work-force that will be hired and trained while the plant is being built. A truly Hercu-lean task. Once you go through the entrance area and into the production hall through one of the many doors, you get a real sense of buzzing activity. Forklift trucks rush along the wide routes marked in yellow. Large empty spaces still fill the shiny light-gray floor, although they are get-ting smaller by the day. A little further back, a lot of the production machinery for the 8HP and 9HP has al-ready been set up. Regard-less of whether it is a Kuka

New JobS ZF creates roundabout 1 200 jobs nearby the city of Greenville, USA.

weLL iNformed All those involved are monitoring the progress.

preparatioN The production hall is still largely deserted.

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robot, Weisser Univertor lathes, or Liebherr milling machines: Here you have the assembled the Who’s Who of mechanical engi-neering. Close by, orange-colored robot arms in wire cages are still practicing their rather clumsy move-ments; elsewhere compo-nents are moving around on conveyor belts to test the system; in another part, people wearing safety vests and protective goggles are practicing how to use the new technology. Every-where in the facility, em-ployees are gathered in small groups, sharing expe-riences, and discussing the next steps before volume production gets underway. Martin Reichl’s office is also a place where impor-tant decisions are made. As the Senior Manufacturing

Manager, the 47-year-old German is responsible for buildings and machinery. Even though he already has the experience of bringing several plants into the world, he still frankly admits: “This investment here is unprecedented for the company and for me personally, too. It is by far the Group’s largest individual plant where I’ve been in charge of planning and construction.” Reichl is familiar with the site since the excavators rolled into action in winter 2010 to complete the enormous earthworks and to create the huge area that is now available for the building. The self-confessed United States enthusiast really likes the way these south-erners knuckle down to work: “We managed to

build the plant much faster and at lower cost than in Germany. Each problem is solved here quickly without any bureaucracy.”

Learn from one another

Just a few doors down, Michael Morris and Mark Calhoun are discussing the installation of other machinery. The two good-humored Americans are in charge of setting up the pro-duction lines for the 8HP and 9HP transmissions as well as the heat treatment plant for hardening the com-ponents. Morris explains their approach: “Our pro-duction is broadly identical to what you find in the Saar-brücken transmission plant. That way we can benefit from our German colleagues’ insights, which will help us avoid any teething problems

We are utilizing some cutting-edge processes, such as laser welding and mechanical deburring, specifically to manufacture the 9HP.”

“

Mark Calhoun, Production Manager

9HPPerfectionism on a Minute Scale

“A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away,” observes French author Antoine de Saint-Exupéry. The man of letters-cum-technophile might have liked ZF’s 9HP, the 9-speed automatic transmission.

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when production gets under way.” Calhoun is really proud of a few inno-vations in the Gray Court plant: “We are utilizing some cutting-edge processes, such as laser welding and mechanical deburring, spe-cifically to manufacture the 9HP. Our German colleagues will then benefit from our experience later on.” It is the close collaboration with the specialists in Saar-brücken, who have decades of experience in manufac-turing automatic transmis-sions, coupled with the fierce pride of our U.S. colleagues, that allow us to keep the risks of this future-oriented project in check. HR Director Michael Ed-monds also shares a great deal of responsibility for Gray Court’s success. He has had to hire the right

number of new staff and train them. So far Edmonds has more than 450 staff on board, with another 600 or so due to swell the numbers in the fall. Training the new staff initially posed serious problems for him. After all, there were only a handful of machines up and run-ning in mid-2011. And the solution? “We simply flew around 100 of our new re-cruits to the transmission plant in Saarbrücken for instruction. There each one of them had a German counterpart right by their side,” he explains. Having returned, this initial contin-gent of staff has spent a long time training their newly hired American colleagues on the plant and equipment that is now operational. To ensure that production starts smoothly

in summer 2013, Edmonds is planning for experi-enced German colleagues to spend several weeks in Gray Court.

Expansion planned

Plant Manager Dr. Ludger Reckmann is optimistic about meeting the ambitious timetable. Because exist-ing customers will take up all the current production capacity at the Gray Court plant, Reckmann’s team is already working on expand-ing the facilities. “Right next to the current plant, we have enough space to expand another 50 percent. We intend to use that space to produce 9HP transmis-sions.” Planning for the ex-pansion is going ahead just as silently as the four flags fluttering in the morning sky outside the window.

Profile of the Gray Court plant

Start of construction (buildings): February 2011Production start: July 2013 Capacity: 800 000 transmissions a year; with 400 000 8HP70 and 400 000 9HP48 versions coming off the line, expansion possibleWorkforce (planned): 1 200 Area of plant site: approx. 90 000 square metersInvestment to date: around US $ 430 million (€ 350 million)Customers: Chrysler with its Jeep and Dodge brands, Land Rover, other customers

a real revolution in fuel consumption. Take the United States for instance, where 4, 5, and 6-speed automatic transmissions currently dominate the market for front-transverse-engined vehicles. The ZF 9HP consumes up to 16 percent less fuel than the current 6-speed transmission.

This is all possible thanks to a host of technical mea-sures. ZF engineers have selected a transmission concept which ensures a very high spread of gear ra-tios and, in turn, leverages the advantage of a high number of gears, while also increasing efficiency. Thus, in certain areas, the use of dog clutches – instead of multidisk clutches – re-duces drag losses. Real value added thanks to ZF’s modular principle: The basic transmission can be supple-mented as required. Differ-ent starting elements, hybrid and all-wheel drive appli-cations can be imple-mented cost-efficiently. More over, the standard 9HP is start-stop capable – no additional oil pump needed!

“One more gear” – you would struggle to find any other ZF product an-nouncement where the first impressions belie the real importance of the innova-tion as with the 9HP: It is the world’s first passenger car automatic transmission with nine gears. And it is aimed at a totally different vehicle category than all ZF’s other passenger car automatic transmissions currently on the market – at vehicles with a transverse engine and front or all-wheel drive. Around 75 percent of all the cars pro-duced worldwide are based on this drive configuration. The 9HP therefore does not replace the current, longi-tudinally installed 8-speed automatic transmission, but constitutes a new design in its own right. This design was needed because the new ZF innovation has to fit in the much tighter front-end installation space – it therefore looks entirely dif-ferent. For front-transverse-engined vehicles – including compact-class cars, vans, and compact SUVs – the new ZF transmission ushers in

As of 2013, ZF will produce the 9-speed automatic trans-mission in the US, where the success of the new driveline technology is guar-anteed. Automakers are pre-paring for the low average fleet fuel consumption fig-ures which will be binding for their commercial vehi-cles starting in 2016. The new CAFE (Corporate Average Fuel Economy) limits, which were set back in 2009, of 6.6 liters per 100 kilometers or 35.5 miles per gallon will become effective on this date.

SaViNGS With respect to comparable 6-speed automatic transmissions, the ZF 9HP cuts fuel consumption significantly.

16%

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How times change: Even 15 years ago, ZF was a predomi-nantly European company; the Group generated sales of DM 1.7 billion (equivalent today to € 794 million), with “just” 22 percent coming from outside Western Europe, and employed just over 9 000 staff outside Germany. The customer list of the then already major automotive supplier read like the Who’s Who of the European auto-motive industry.

By comparison, today the ZF customer roll call includes names that only the well-traveled will recognize: construc-tion machinery manufacturers from India, bus and truck brands from China and Brazil. The global orientation in ZF’s business is, however, not just about these new customers from the Far East or Americas. Even with its traditional customers, ZF maintains supply relationships across the

entire globe. Accordingly, the proportion of sales that ZF generates outside Europe continues to grow steadily. It is now 43 percent, i.e. € 7.4 billion, with more than 50 percent forecast in the medium term. Accord-ing to ZF CEO Dr. Stefan Sommer, ZF’s declared strategy is now “to grow with the major global play-ers”. The consequence of this goal is not primarily to open up a large number of new international locations.

Automakers can open plants wherever they want in the world – ZF is already there in most cases. The Group is in pole position in many countries whenever new production partners are wanted.

A Global Presence

Global production of ZF passenger car chassis systems

ZF’s 14 worldwide production locations for car chassis systems are CLoSe to the CuStomer – no more than 40 kilometers (25 miles) in fact.

≤ 40 km

Australia:Adelaide

China: ChangchunShenyangPeking

China:

Thailand:Rayong

India:Halol

South Africa:SpartanEast-LondonRosslyn

USA: ChicagoDuncanTuscaloosa

UK:Solihull

LebringAustria:

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The Group already boasts the considerable number of 121 production companies in 26 countries – an outright three-fold increase compared with 1996, which also reflects major acquisitions, such as the Mannesmann Sachs AG in 2001. This figure will undoubtedly rise further. Yet basically it is all about systematically utilizing ZF’s existing global network – or, if you will, putting down the global horsepower, which ZF has in abundance, onto the business road as efficiently as possible.

Tailor-made for the markets

This starts with engineering. Most ZF products, which are also produced outside Europe, first have to be adapted to local market conditions. On the one hand, this involves meeting the prevalent cost structures in each country with-out compromising on functionality and the hallmark ZF quality. On the other, technical specifications have to be adjusted to market conditions: Commercial vehicle trans-missions have to be tuned to actual engine torque and aver-age transport weights; shock absorbers designed to meet

typical load profiles. ZF has a well-oiled international development network to fulfill these tasks: The main devel-opment locations Friedrichshafen, Dielingen, Passau, Schweinfurt, Schwäbisch Gmünd, Northville near Detroit (USA), Pilsen (Czech Republic), and Shanghai (China) are in contact with several customization locations near to the large, in-country ZF plants. Corporate R&D also coordi-nates and supports the activities at the development center in Tokyo (Japan). Jointly, they devise specific solutions in product design. In the case of product development and customization, the divisions control the process; the Corporate R&D locations are called in whenever fundamental research questions are involved.

Design-to-market also enables very extensive development packages to be handled in the target country itself – as ZF Lenksysteme demonstrates, a joint venture between ZF and Bosch: The electric steering, originally developed in Germany, was first adapted in China for the Asian mar-ket. In addition, an electric steering variant, especially

iNCoNSpiCuouS GLobaL pLayer Worldwide just under three million new car owners have no idea that the chassis on their car comes from ZF.

AxleUniversal Diversity

The suspension is a determining factor in the characteristics of any automobile. Front and rear axles are also very complex from an engineering viewpoint because they consist of a multitude of subcontracted components. And that is why many automakers simply source them as a complete unit from ZF – and do so right around the world.

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suitable for small vehicles, was almost independently developed in India - with costly development work such as software, hardware, and electronics testing carried out locally. The steering will go into volume production at the Pune location in 2013.

Close to the supplier

External vertical integration increased sharply at ZF over the past few years. Currently, it is around 60 percent on average. This clearly illustrates just how important suppliers are for the kind of innovation and cost leadership which ZF has or intends to acquire in all its product segments. ZF’s global footprint also demands the supplier base to be internationalized. The best cost sourcing approach is the preferred solution in this respect. It considers the specific strengths of the suppliers in the global markets, depending

mobiLity looks very different around the globe. ZF finds the right answers everywhere with design-to-market.

Systemsproduction expertise: ZF has set up 12 locations over the past 18 years. In Austra-lia, China, the UK, Austria, South Africa, Thailand, and the United States more than 3.1 million passenger car axle sets were assembled in 2012 – and rising. ZF boasts the full gamut of localiza-tion skills: Requisite parts or components can be sourced

locally or supplied world-wide from other ZF loca-tions. Depending on vo-lumes, setting up in-house component production may be a viable alternative. Thus, ZF axle systems have a global presence – but they differ fundamentally from each other depending on the vehicle: universal versa-tility par excellence.

The automotive industry is renowned for fundamen-tally rethinking traditional processes at regular inter-vals – coming up with inno-vative approaches as a re-sult. Just like at the start of the 20th century with the advent of assembly-line production, resulting in af-fordable car production. Towards the end of this century, automakers funda-mentally restructured the supply chain by examining the make-or-buy decision. And that decision was “buy” in many specialist dis-ciplines, including the sus-pension – thus paving the way for the component sup-plier ZF to forge a new sys-tem partnership. From then on, complete front and rear axle systems came from ZF assembly plants, which were usually built near to the automakers’ new pro-duction facilities. Along with assembly, ZF fre-quently also took over deve-lopment, supplier manage-ment, and logistics compe-tence for just-in-time deli-very. Passenger car axle systems remain a prime ex-ample of ZF’s international

INCREASING VOLUMES ZF has been producing complete passenger car front and rear axles since 1995.

4 000 000

3 000 000

2 000 000

1 000 000

Forecast

2008 2009 2010 2011 2012 2013

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on each commodity group. Procurement is based on TCO (total cost of owner-ship) considerations. In addition to the price of parts and tool costs, quality, technology, logistics, and all the associated costs are factored into the contract award process. Of course, the aim is to only place new purchasing volume with strategic suppliers. “Local for Local” is another impor-tant objective, which is cen-tral to global materials

management. ZF customers in particular insist on greater integration of local suppliers for their local production. The upshot is that ZF has developed important strategic partners in all key markets over the past few years. The Group also maintains an intensive partnership with all its local suppliers. Thanks to excellent collaboration in a region or a country, local suppliers frequently qualify for global business. “Local for Global” is therefore another strategic approach. For many years, ZF has been pursuing cross-divisional commodity management for production materials. Supply Chain Management & Purchasing fine-tuned this approach as part of its Advanced Procurement Strategy 2025 (APS25), which was launched in 2011, and integrated it into an overall strategy. “One Face to the Supplier” and the associated systematic bundling of global demand is one result of these strategic approaches.

keep SuppLy ChaiNS ruNNiNG ZF products make it possible. The company resorts to local suppliers worldwide for its own production.


EcomCommercial vehicle requirements are somewhat similar in many countries. As such, you do not need to reinvent each individual gear wheel in the driveline. Multinational commercial vehicle manufacturers also share this view, thus paving the way for the phenomenal success of the ZF-Ecomid truck transmission.

The Global Transmission

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Overall, ZF aims to achieve further optimization and increase the value added of materials management step by step through these initiatives.

Continuous training: ZF Supplier Academy

The ZF Supplier Academy and the associated targeted pro-motion of selected partners constitutes another component in the further development of ZF suppliers. Within the framework of this permanent training facility, ZF trains suppliers regarding Group-specific requirements such as standards, directives, processes, and tools. Training courses also reinforce existing relationships and help prevent errors – while also optimizing processes on the part of the suppliers. Training at the ZF Supplier Academy also ensures that materials management processes are imple-mented sustainably. Interest is increasingly shifting to the issue of sustainability. Self-assessments oblige suppliers to ensure they have sustainable processes in place through-out their business. ZF intends to verify the individual areas as part of regular audits and communicate the results in feedback discussions. The aim is continual improvement on all levels.

Product HeroEcomid


20 yearS’ iNterNatioNaL experieNCe ZF’s business with agricultural and construction machinery like here at the Pune location, India.

mid

Three continents, three commercial vehicles – all manufactured in their res-pective countries. And yet a municipal vehicle from Curi-tiba in Brazil, a refrigerated

van from Qingdao in China, and a long-distance truck in Kazan, Russia, have one thing in common: their ma-nual transmission, the ZF-Ecomid. And all despite the transmission also being pro-duced in each particular country.

The Ecomid manual 9-speed transmission is a global ZF product. It is manufactured in five locations: Bouthéon (France), Sorocaba (Brazil), Naberezhnye Chelny (Rus-sian Federation), Hangzhou (China), and Pune (India). Some 600 000 units in vari-ous configurations are in service around the globe.

The fully synchronized manual transmission for medium and heavy trucks is easy to operate. The particularly powerful star-ting gear (crawler) provides assistance when setting off with high tonnages or on a gradient. The fuel-efficient, economical ZF transmission develops torque between 1 100 and 1 300 Nm. The compact design and the high power-to-weight ratio are especially attractive for

truck manufacturers. Fur-ther compelling features in-clude its robustness and – thanks to its helical gearing – its quiet operation. Anyone looking for even more per-formance can further incre-ase safety and operating comfort with additional op-tions such as the integral retarder or Servoshift, the gearshift support, while minimizing the likeliness of wear in equal measure.

But the Ecomid is not iden-tical everywhere: In China, larger loads tend to be transported, on average, with medium trucks – and for that reason the size of certain transmission com-ponents will be different than, say, in Europe. The ZF Engineering Centers, which tailor the Ecomid to specific market conditions before the transmission is produced locally. Ecomid is therefore not just a prime example of global market success, but also illustrates how to achieve that suc-cess: knowing the markets and adapting the product to specific requirements – by means of design-to-market.

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Enter the ZF subsidiary on Tuas Drive 1 on the western outskirts of Singapore and the first thing you notice is a pylon table display with the ZF logo at the reception area, leaving you in no doubt which company you are visiting. The storeroom shelves are full of neatly stacked boxes with ZF genuine parts, which the service engineers need for their maintenance work. An outsourced logistics center also houses spare-parts packaging with other logos: The product brands in the spare-parts business which ZF com-bines under one roof. The Sachs logo is emblazoned on the clutch packaging; shock absorbers are packed in Sachs and Boge boxes; the Lemförder logo proudly adorns the chassis and steering parts. Spare parts for steering systems are offered under the ZF Parts brand. The space that ZF allocates to the traditional product brands is related to these brands’ strong market position in the spare-parts business. And that strong market position is also felt here, in the

heart of Southeast Asia. The situation is just the same as in Singapore at more than 650 other service outlets world-wide – with characteristic differences: After all, Singapore is a key business hub for ZF. Here the service organiza-tion bundles its expertise in very different ways; that expertise also stretches way beyond the Asian metropolis to the entire Asia-Pacific region, with service subsidiaries in India, China, Australia, Japan, and many other countries in

1.3 m.LoGiStiCS power iN the Spare-partS market ZF Services supplies 1.3 million items in 160 000 shipments worldwide a year.

With its global service organization, the ZF Group supplies spare parts and carries out repair and maintenance work in virtually every corner of the globe. The service portfolio benefits from the technical expertise of the standard equipment supplier ZF – while also providing a complete, compelling portfolio. A win-win relationship.

Close to the Customer

SuppLemeNt Good produCtS with Good SerViCe more than 650 ZF service partners and global spare-part logistics do precisely that worldwide.

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the region. In addition to logistics supply with spare parts for driveline, chassis, and steering technology, the service portfolio includes remanufacturing and repairing ZF prod-ucts in their own workshops as well as diagnosis and field service. Service staff from Singapore support customers locally with all repair and maintenance issues. Singapore Bus Services Transit (SBS Transit) with around 3 400 buses in its fleet is an important local customer. Singapore demonstrates that ZF does not just offer servicing right around the world. Spare-parts business always goes hand in hand with maintenance, repair, and consulting services.

Spare parts in OE quality

The Group’s expertise as a standard equipment supplier provides a compelling argument for ZF products in the spare-parts market. Renowned automotive and commer-cial vehicle manufacturers around the world trust ZF components for their vehicles – why should not end cus-tomers also do the same when replacing wear parts such as clutches or shock absorbers? The same expertise and production equipment used for volume production is also used to manufacture spare parts from the ZF Group. ZF’s spare-parts portfolio is also very broad on account of the service obligation for its product portfolio: transmissions, transmission parts, clutches, steering systems, axles, and chassis components, as well as shock absorbers and rub-ber-metal parts for all types of vehicles – from the con-struction machine to the intercity train, from the city bus to the farming tractor. Spare parts from ZF Services are also established in the off-highway segment: with marine applications, helicopters, and, most recently, with wind power turbines.

ZF Services focuses on two key areas in this respect – spare-parts business and servicing. The ZF organization is one of the largest players in the spare-parts business. Here the customer base includes in particular workshops, large fleet operators, and wholesalers. Speed and availability are the critical success factors in the spare-parts business.

Logistics is the discipline par excellence: Spare parts from ZF product brands must be easy to order for the workshops and delivered twice a day – that is at least the standard in Western Europe. ZF Services supports its aftermarket business with a compelling portfolio for wholesalers as well as for workshops and fleets. Wholesalers have another advantage in light of the broad spare-parts portfolio: Many of them take advantage of the opportunity for one-stop shopping with a single contact. But ZF Services also pro-vides workshops and fleets with technical information and training – thus ensuring that the ZF spare parts are also installed faultlessly in the customer and commercial vehicles. Logistics power is organized in a seamless supply chain. It starts with e-business solutions with versatile interfaces for all partners, especially independent workshops, has access to five central warehouses in Germany and regional warehouse locations, and ensures rapid, reliable supplies

Broad base: The ZF Services portfolio includes spare shock absorbers as well as repairing wind turbine gearboxes.

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to business partners worldwide. ZF Services systems boast 43 000 “live” item numbers; in total ZF supplies more than 1.3 million items a year, packed in 160 000 shipments.

Helping hands: maintenance, repair, consulting

With many customers – primarily owners and fleet own-ers of commercial vehicles, servicing requirements go beyond supplying wear parts. Other parts and components also need to be regularly replaced when maintaining trans-missions and axles, which tend to clock several thousand operating hours or around a million kilometers. This work is, however, not part of an independent car or truck work-shop’s standard business, and hence the need for ZF exper-tise. For that reason, over 650 ZF service partners world-wide offer repair and maintenance services – also preven-tive services so that a breakdown can be avoided in the first place. With the “ZF Plus” service program, customers can

access the Group’s technical system knowledge wherever and however they need it – irrespective of whether it entails spare parts, repair, remanufacturing, training, service concepts, or customer service. And ZF also has experts on hand locally: More than 4 000 ZF employees or its partner workshops can be called on immediately. ZF experts from the service subsidiaries quickly get out to the customer locally in their “flying doctors” role. Not just in emergencies when it is all about rapid diagnosis and fitting an exchange unit, but also with theoretical or hands-on training courses for the customer’s workshop staff. Service inspectors can even fly out from Germany if highly specialized expertise is required.

Service: the local face of ZF

No wonder then that the “local face of ZF” is the particu-lar service team in many regions. The Group also benefits

from this setup for its OEM business with automakers. The flexible, universal supply of spare parts and repair services is today a precondition for a good market position, such as in the global city bus business. After all, here, fleet owners decide which axle or which transmission from the OEM is installed in their vehicle. Local servicing quality plays a decisive role: The more satisfied customers are with servic-ing, the more likely they are to equip the next generation of vehicles with ZF products. Service staff are also an impor-tant source of information for product development: What features should the perfect truck transmission of the future have? What are the requirements for mixed bus fleets when you are looking at telematics systems? Developers from the divisions and Advanced Engineering from Friedrichshafen also draw on the service staff’s practical experience with questions like these. And these service staff then approach their customers whenever suitable product innovations are available – such as with the rollout of Openmatics, the open telematics system, which ZF Services employees in Hong Kong presented to their customers. ZF Services experts also provide assistance when taking part in public invitations to tender. In this way, the close collaboration between divisions and ZF Services is also perfectly suited to promoting new business.

It is no different in Singapore. Some of the “Next 15 coun-tries” – tomorrow’s emerging markets, if you like – are direct neighbors. In these countries, trucks that are 30 or more years old are used daily – also with ZF transmissions. You need spare parts and repair know-how to keep them running. No problem from the business hub in Singapore because the Group retains spare parts for major products far longer than the 15 years that is the industry norm. If business picks up soon in some of the “Next 15 countries”, there is no doubt where the next ZF table pylons will be set up.

The more satis-fied customers are with servic-ing, the more likely they are to refit the next generation of vehicles with ZF products.

iNterNatioNaL SerViCe hubS like here in Dubai safeguard the business in dynamic market regions of the world.

Support oN maNy LeVeLS ZF Services offers technical expertise so that ZF products can unfold their full potential.

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DEMONSTRATERELIABILITY

DAILY

ZF can look back on almost a century of tradition whose fundamentals the company reaffirms every day through its high-quality products and services that customers can rely on. That is the hallmark of the corporate culture. ZF employees too can rely on each other – in teams that often collaborate across national borders and time zones. Individuals who do not work for the Group or buy its products can also benefit from the company’s strength. After all, social commitment is just as much an integral part of ZF as company tradition.


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Reliable technology is the decisive factor in all product applications. ZF makes a major contribution in this respect. And to ensure that this is also the case in the future, customer orientation extends throughout the entire Group. It is an approach that is reflected in the product strategy, in quality, in the availability of spare parts, and its global service network.

Earning Trust

Skydivers check their equipment themselves before each jump. Even a minor mistake could prove fatal, so they usu-ally rely on themselves for this final check – rather than asking anyone else to shoulder the responsibility. In today’s world, with its increasing specialization, many professions cannot adopt the same approach: rescue helicopter pilots, naval captains, truck drivers, and racing drivers – they all entrust their professional success, and often their own per-sonal safety to complex technology whose intricate work-ings they cannot possibly understand, let alone check. They must simply rely on everything to work. The same also ap-plies to ZF technology and services, which are equally at home in helicopter transmissions and marine applications, as they are in the world of motorsports.

Yet reliable technology is also important in less risky areas of daily life, such as passenger or goods transport, where people’s livelihoods depend on technology. If buses or trucks break down that means, at the very least, a loss of earnings for the forwarder or fleet owner – not to mention

TighT Time frame Agricultural machinery has to work without fail during the harvesting season.

Technology for The rescuers ZF helicopter transmis-sions reliably support rescue missions.


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can be achieved through a simultaneous development and production process. The lean processes in the ZF Produc-tion System ensure that products are ultimately developed that meet the high-tech requirements and combine superb quality with attractive competitive prices. That has conse-quences beyond the workshops: The principles of the ZF Production System therefore do not just apply directly to production; they also involve indirect areas such as Devel-opment and Logistics.

New product means additional customer value

Whenever reliability and customer orientation are strategi-cally important, as at ZF, this not only affects the quality of current products, but also the quality of the next genera-tion. All ZF divisions incorporate customers – and often also the customers’ customers – into their planning and design processes when it comes to extending or updating the product portfolio. Consequently, each new product generation also adds a healthy dose of utility value: Passenger car and commercial vehicle transmissions help

the damage to their image among customers or passengers who, in turn, rely on goods arriving on time or the bus arriving at the stop as scheduled. And then there are the drivers on the road – perhaps on vacation – who get annoyed when their car breaks down because of a defect. Things have the uncanny knack of breaking down when you least want them to.

A holistic approach to quality

That is why reliability is crucially important in the mobil-ity sector. Manufacturers of passenger cars, commercial vehicles, off-road machinery, marine, aerospace, and industrial applications promise their customers reliable tech-nology. That’s why they also take into account compliance with high quality standards when selecting or continually assessing their suppliers. ZF has aligned all its processes to ensure customers ultimately receive a product that meets the highest quality requirements. What does the Group focus on in particular? On everything. ZF combines classic corporate disciplines such as quality management, supplier

management, energy management to create the holistic ZF Management System. Because everything at ZF is inter-connected: Reliable volume-production quality depends on stable processes in the production facilities, and on strate-gic decisions regarding product development. It also relies on highly skilled ZF employees and well-trained ZF suppliers who must be familiar with the interfaces to the ZF production processes. This holistic approach is particularly important when it comes to combining reliability with cost leadership. After all, high product quality and reliability

PrevenT downTime ZF technology for trucks ensures that goods arrive on time.

Compared with the once customary transmission oil change intervals (every 80 000 km) and with a mileage of 1 million kilometers, a ZF automatic transmission system for trucks now consumes just one-sixth of the previous figure.

2011:

12 oil changes

1 oil change

26 liters

2002: 155 liters

Lower maintenance costs with ZF technology


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consistently reduce fuel consumption and emissions. Driveline electrification in all mobility applications – from the compact car to the motor yacht – paves the way for compelling additional functions that enable a construction machine to maneuver or a vessel to silently enter a port. ZF chassis systems consistently weigh less thanks to light-weight construction. Often they no longer require as much installation space – giving automakers more design flexi-bility. The independent suspension for heavy trucks may be 40 kilograms lighter, but it is also more comfortable and reduces fuel consumption. ZF commercial vehicle trans-missions are requiring fewer and fewer oil changes and longer maintenance intervals, which reduces service

endurance TesT ZF driveline and chassis technology withstands the grueling demands of motorsports.

8HPTour de Force on the Production Line

Manufacturing a complex product with high quality – nothing remarkable about that. Pulling off a combination of quality with substantial volumes, a multitude of versions, and at a competitive cost – well that is an absolute tour de force. ZF pulls it off many thousands of times every day.

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reliabiliTy even afTer more Than 75 years ZF supplies classic cars with spare-part and repair kits.

customer workshops on site, including those run by mu-nicipal public transport operators whose fleet is equipped with a wide range of ZF driveline and chassis technology.

ZF Tradition

The Group assumes special responsibility with its ZF Tradition program. ZF only recently built a replica of the 75-year-old semi-synchromesh Hurth G 328 transmission for the prewar classic sports car, the BMW 328 – ensuring that the replica met the strict specifications of the classic car racing organization, FIVA. ZF will also recreate replicas of its own classic transmissions if suitable customer interest is expressed and the project is financially viable, such as the S 5-20 5-speed manual transmission. Several Mercedes-Benz models, including the legendary 230 SL, 250 SL, and 280 SL “pagoda”, were equipped with this transmission as an option between 1964 and 1976. ZF Tradition also sup-plies new spare-part and repair kits for this and other transmissions. Automakers have written fascinating chap-ters in automotive history together with ZF – and the trust in the ZF brand shows that this tradition will continue well into the future.

downtimes and life cycle costs for operators. Products with high utility value are likewise compelling products that gain market acceptance more easily. Yet customer orienta-tion at ZF does not stop once a new product has been shipped. Reliable technology lasts, so it is hardly surprising that vehicles with ZF technology registered 30 years ago or more are still providing sterling service in certain regions of the world – run by operators that at present cannot af-ford a vehicle equipped with the very latest ZF technology. For many of these vehicles, ZF is still supplying spare parts, which have to be replaced at regular maintenance inter-vals. With more than 650 service partners around the world, ZF has trained personnel and workshops available for this kind of maintenance work.

And yet if – for whatever reason – a ZF product should fail, customers have access to a global service organiza-tion. Rapid damage analysis and the provision of exchange units or spare parts ensure minimum downtime and, in turn, minimum interruptions to operations. Nonetheless, ZF focuses firmly on preventing breakdowns. ZF Services technicians share the necessary maintenance know-how at


plenty of engine power and limited installation space, the high-powered luxury-class sedans, to the all-wheel-drive SUVs with off-road capability.

The secret of this success lies in ZF’s painstaking pre-parations from the moment volume production of the 8HP began enabling ZF to quickly ramp up production figures in response to the market success. The groundwork had already been laid with the product development – thanks to a systematic design-for- manufacturing concept and early collaboration between development and produc-tion engineers. This simul-taneous engineering also took in the entire supply chain. Even the quality of the initial pre-production transmissions coming off the production line was su-perb. Reliability is therefore a question of organization and experience. ZF is now transferring this winning formula to the North Ame-rican market, with volume production of passenger car automatic transmissions –

including the 8HP – slated to begin in 2013 at the ZF Gray Court location in South Carolina, USA. The North American market has

provided huge market op-portunities for fuel-efficient passenger car technology for many years. The time is therefore ripe.

The time was simply ripe for the 8HP when it was launched on the market in 2009: the same shift com-fort, the same sporty genes as its predecessor with 6 gears, plus fuel savings of between six and eleven per-cent to boot. For automa-kers looking to shed every last gram of CO2 emissions in their new vehicles, it could not have come at a better time. The media and end customers were likewise impressed. Orders, adapted versions, and customer numbers increased relent-lessly.

Since then, the ZF Saarbrü-cken location – with com-ponents delivered from the ZF facilities in Schwein furt and Passau – has produced over three million 8-speed automatic transmissions. More than 8 000 transmissi-ons roll off the production line in Saarbrücken every day. There are now approxi-mately 174 product versions – with many automakers using ZF automatic trans-missions throughout their entire model ranges: from the mid-range vehicles with

one every eleven seconds 8 000 automatic transmissions roll off the production line at the ZF Saarbrücken location every day – primarily 8-speeds, with zero defects.

8 000


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At ZF, the knowledge and experience garnered over almost 100 years of successful business have been integrated into the Corporate Principles that were adopted in 2011. To-gether with the ZF Corporate Social Responsibility policy, they form the foundation for a value-oriented and success-ful corporate culture which is also resilient enough to inte-grate employees internationally. Under Our Culture it states: “We nurture a climate of mutual respect and fair-ness within the company and in our interactions with part-ners. A diversity of different cultures is also highly valued in both our internal and external business functioning.” With the regular CEO breakfast, Dr. Stefan Sommer has intro-duced a new format for exchanging information. A small group of employees has the opportunity to get to know the CEO personally, air their concerns, and share their ideas. “I realize of course that I personally only reach a handful of colleagues through this initiative, but I’m interested in their views of the Group and what motivates them indi-vidually,” is how Dr. Sommer explains his motivation. The new Corporate Headquarters in Friedrichshafen will send out a highly visible signal that reflects this sense of com-munity and openness: The ZF Forum will also be a meeting

place for customers, partners, schoolchildren, students, employees, and the public starting in 2015. It will also in-clude the ZF Academy for education and vocational train-ing for employees and ZF Services, and be home to a “glass workshop” for children and adolescents, which is part of Wissenswerkstatt Friedrichshafen e.V., as well as a students’ research center. 134 HR managers from all the divisions and regions gathered in Friedrichshafen for the first time in summer 2012 to take part in an international knowledge sharing event, which will change the company and ensure it remains as successful as it is now. After all, more than half of the ZF workforce will be employed outside Germany within just a few years. More than ever, the skills and

A culture based on community has always been the hallmark of ZF. Newly acquired companies have repeatedly served as a major driving force. Our dynamic growth is also a result of ZF’s respect for its long-standing traditions and for individuals, their ideas, and their diversity.

Embracing the Corporate Culture

520in fall 2012 520 Trainees joined ZF in Germany – an unprecedented figure for the company.

ceo breakfasT A small group of employees has the opportunity to get to know the CEO personally, air their concerns, and share their ideas.


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automation technology. Around 15 applicants for every po-sition is testimony to the widespread perception that ZF of-fers high-quality training. At its Gray Court location, South Carolina, United States, ZF has teamed up with Piedmont Technical College to introduce a combined degree program similar to the German model. The training program will then be extended to ZF locations in Brazil and throughout Asia. ZF wins over tomorrow’s executive managers with its combined, dual-study program that combines practical on-the-job training with academic study. Global trainee programs provide another option for international loca-tions. The Junior Management Program (JuMP) prepares

willingness of employees to bring these colleagues on-board will be crucial to the company’s success. How you build up a workforce worldwide that is both qualified and motivated is one of the major challenges posed by internationalization.

Ensuring tomorrow’s success

The Human Resources strategy aims to recruit, retain, and develop good staff. Its key areas relate to demographics, diversity, leadership excellence, and talent management, for which separate departments were set up. They act as Group-wide competence centers and provide a uniform di-rection and shared values – without masking specific regional characteristics or centralizing decisions. In Germany, ZF takes on more than 500 trainees annually, making it one of the key training providers at the locations. ZF also plays an important social role with this commitment: Qualifications provide young people with a key advantage for the rest of their life. Young people embarking on a career tend to be attracted to engineering careers, such as industrial techni-cians, mechatronics engineers, or electronic engineers for

ZF Corporate Social Responsibility policy

Together with its employees around the world, the ZF Group is facing the challenges of globalization. To this end, collaboration based on mutual respect at all levels is needed which indeed constitutes a major component of our corporate culture. The common interest of employees, employee representatives, and company management is to sus-tain our international competitiveness in all areas with a view to achieving the sustain-able commercial success of the entire company and its employees for safeguarding the future. The combination of economic targets with social and environmental aspects is crucially important to ZF. The company is convinced that its business must take social interests into account.

junior staff for a management role outside Germany or an international project management function. Meanwhile, training programs aimed at long-standing expert staff and executive managers ensure their knowledge and expertise is continually brought up to date.

Ensuring tomorrow’s knowledge

Rapid change and the relentless pressure to innovate within the industry make lifelong learning a core task for all employees. The “Learn in the Net” program offers var-ious e-learning seminars which employees can attend without having to leave their desk. Human resources de-velopment therefore fosters the ideal conditions for build-ing up highly qualified teams at all locations. Region-specific development programs such as Challenge Leader-ship Asia Pacific are also available for executive managers in one of the key new markets. Existing trainee programs are being extended to five countries, including Brazil and India. International experience will be part of the core competencies of executive managers looking to build a successful career.

Training At its locations around the globe, ZF is one of the largest companies offering training and apprenticeships.

“The” undisputed challenge is to develop, expand, and make knowledge available to everyone within the company.

women in managemenT PosiTions The goal is to double the number of women at ZF by 2020.

+50%The number of inTernaTional eXecuTive managers at ZF is to increase by 50 percent from the current figure through 2020.

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Fair opportunitiesCollaboration with universities helps forge strong links with young junior staff early on by means of internships and trainee-ships. ZF does not use interns to replace regular jobs and only employs students who are registered in a university pro-gram. And, of course, interns receive suitable remuneration for their work. Reconciling work and family

In 2006, ZF successfully imple-mented the berufundfamilie® audit at its Friedrichshafen loca-tion. The audit confirms a host of measures: access to telecom-muting and part-time work, arranging childcare, also during vacations and in emergencies, and finding suitable daycare centers. A re-audit confirmed the certification in 2009 and 2012.

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Healthy and secure jobsPlant physicians monitor the health and safety of employees at the German locations. They are quickly on the scene in the case of accidents and offer wide-ranging preventive health-care: from ergonomics checks, health checks for executive managers and flu vaccinations, to addiction counseling.

Developing employees, motivating them, keeping them healthy and productive involves various factors, depending on each particular stage of life. This approach calls for tailor-made HR concepts – and not just at the German locations. Others can learn from best practices.

Lifelong responsibility

Training and careerBased on a dialog-oriented man-agement and corporate culture, ZF primarily trains qualified talent from within, both for experts and managerial positions. Likewise, ZF employees – if equally qualified – are given preference over external recruiting when it comes to hiring managers.

Company pension schemeZF has set up its own pension scheme to reflect the growing importance placed on company pension provision. All permanent staff in Germany are entitled to receive a ZF pension, which is made up of a company-financed component and a contribution from the employee.


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it did initially mean losing part of our identity. We now intend to fine-tune our shared identity by roll-ing out management guide-lines that apply worldwide.J. Kirchgässner: First and foremost, we need to rein-force staff ties with the company internationally and communicate the special ZF culture. We are going to look very closely at how the social systems are set up in the various countries and what role codetermi-nation plays. At the same time, greater flexibility and mobility are becoming in-creasingly important. But

we need to have a struc-ture that will also benefit our employees.J. Holeksa: International-ization will in any case gather momentum. And that is something we need to see as an opportunity, for example, with interna-tional assignments lasting one or two years – an in-dispensable career compo-nent at ZF in future. But there are employees who do not want to, or simply cannot do that. And we need to look after them, too, because they are just as important and valuable to us.

What does codetermina-

tion entail at ZF, also in a

period of internationaliza-

tion?

J. Kirchgässner: For me it means solving problems when and where they occur, not wasting any energy on conflicts produced down the line.J. Holeksa: Codetermina-tion is not just about having a say in decisions; it is also about playing a part in im-plementing those decisions. And that is why we, the company and its employ-ees, are so successful to-gether. We follow our cus-tomers wherever they need us as a component sup-plier. Because there is no alternative. Codetermina-tion is then a control mech-anism for conflict resolu-tion. We reach better, faster solutions if employee representatives are in-volved and understand the

ment to keeping the core team onboard. Against this backdrop, we managed to provide a great deal of support and explain the situation even when it was not all that easy. Some agreements are still work-ing well even today, like the ZF Group Works Council agreement on sab-baticals. Another example is in-depth training at ZF, including in the United States or in Brazil. I am de-lighted that our combined training programs have been such an export hit. J. Holeksa: At the Fried-richshafen location we are

also very good at helping employees reconciling the demands of work and fam-ily. We now intend to learn from that experience and develop tailor-made con-cepts for other locations.Which topics will ZF need

to address Group-wide in

future?

J. Holeksa: More systemic concepts will definitely en-able us to exploit a great deal of untapped potential. That means generating synergies and transferring successful models. The merger* makes this easier – a necessary step, even though for many employees,

background. That is why we engage in close dialog – on the ZF Supervisory Board, by attending the Group Works Council and the European Works Coun-cil meetings.J. Kirchgässner: Today, co-determination means appre-ciating that internationaliza-tion safeguards jobs here in Germany. Of course, some production is also out-sourced – particularly the simple products – which does have negative reper-cussions for the German lo-cations. Then we negotiate measures aimed at safe-guarding jobs. This enables us to justify these measures to the workforce. We cer-tainly cannot simply trans-fer our strong tradition of codetermination to other countries, but setting up these kinds of structures worldwide is a logical step. Our international contacts

have increased substantially over the past ten years, and in the European Works Council we now regularly have representatives from Brazil as our guests.What is ZF doing to

encourage employees to

take responsibility?

J. Holeksa: In keeping with ZF tradition we sat down with the employee representatives and IG Metall to decide on the Corporate Social Responsi-bility policy. And it was more than just paying lip service. These principles express what is important to us. Issues like giving every employee worldwide the right to organize them-selves collectively and en-suring that everyone can live on what they earn.J. Kirchgässner: In the 2008 crisis, the ZF Board of Management expressed its unwavering commit-

The pronounced culture of codetermination and mutual trust was an issue raised in the conversation between Jürgen Holeksa, Member of the ZF Board of Management, Corporate Human Resources, and Johann Kirchgässner, Chairman of the ZF Group Works Council, in January 2013.

“We reach better, faster solutions if the employee representa-tives are involved and understand the background.”Jürgen Holeksa, Member of the Board of Management of ZF Friedrichshafen AG, Corporate Human Resources, in Friedrichs-hafen (picture: to the left, together with Johann Kirchgässner)

Working Together

* The main subsidiaries were renamed ZF Friedrichshafen AG in 2011/2012.


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susTainabiliTy as a guiding PrinciPle Creating a balance between economic, environmental, and social interests.

ZF’s Corporate Principles express the company’s shared philosophy in five values: identity, responsi-bility, values, culture, and vision. Their purpose is to give the rapidly growing company its future direc-tion and reinforce the feel-ing of solidarity worldwide. Internationalization al-ready characterizes ZF and is set to further change the company – a strategy that opens up new markets

also become the visible guiding principle of how we do business with our partners and suppliers. This compact consists of ten universal principles of responsible globalization – drafted by UN General Sec-retary Kofi Annan in 1999 – to which more than 10 000 businesses and organiza-tions have already signed up worldwide. It commits the signatories to maintain and promote human rights,

ZF has become one of the world’s 10 largest automotive suppliers thanks to value-oriented corporate governance. For the company, whose dividends support two nonprofit foundations, sustainability means reconciling growth with society.

Managing and Doing Business Sustainably

environmental protection, good working conditions, as well as preventing cor-ruption and bribery, thus creating a sense of trust in our complex and turbulent world, above and beyond individual corporate inter-ests, national legislation, and cultural differences.

Compliance: more than

complying with the law

The basis for this is estab-lished by compliance with

worldwide and, in turn, also calls for a new level of corporate responsibility.

UN Global Compact: act ing

responsibly worldwide

ZF reaffirmed its commit-ment to be a “good global citizen” in its Corporate Social Responsibility policy and by joining the United Nations Global Compact in May 2012. The principles that apply to all employees within the company should

the law, company directives as well as anchoring corpo-rate values in all countries, on all continents. Today, this is called compliance. It means, to turn what is largely common sense into clear rules so that every employee – regardless of whether they are in Germany, Brazil, India, or Japan – knows what is ex-pected of them. The ZF Code of Conduct is pub-lished in ten languages and

Universal prin-ciples set the framework: respect human and employee rights, promote environmental protection, and act lawfully.


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corPoraTe resPonsibiliTy The efficient use of scarce resources has been an issue for 300 years.

Group’s financial strategy is based on modern control-ling and management tools. Profitability and availabil-ity of liquid assets are im-portant targets. In addition to this internal financing, ZF utilizes a mix of differ-ent financing instruments to provide loan capital. The most recent example from 2012 are bonded loans, which were oversubscribed several times, and which combines the Group’s need for financial risk provision-ing and institutional inves-tors’ demand for attractive investment opportunities. The future belongs to those companies that tap into new opportunities while avoiding risks. More and more stakeholders therefore

going to act properly and responsibly for the environ-ment today. Topics such as scarcity of resources, ur-banization, and population growth are forcing compa-nies more than ever to find a balance between environ-mental, social, and eco-nomic aspects in their busi-ness operations in order to safeguard their own future and to come up with new answers. Sustainability as

a company that deals with its partners fairly and hon-estly. Maintaining and rein-forcing this trust worldwide is a core task of the Compli-ance department that was set up in 2008. In addition to numerous classroom-based training courses, it has also rolled out an e-learning tool that provides all employees with every-thing they need to know about the rules. Anyone

was given to every em-ployee. It provides the vir-tual backbone of the com-pliance organization, which monitors compliance with the Code and ensures it is embraced within the com-pany. Training sessions ex-plain the principles and in-clude role-play exercises on potential conflicts so em-ployees learn how to deal with everyday require-ments. After all, increasing internationalization and ris-ing transparency require-ments from customers make a systematic approach indis-pensable if we want to pre-serve and also demonstrate reliability where doubt arises. Customers, suppli-ers, employees, and society have always regarded ZF as

that needs help and advice in a specific situation can ei-ther contact the Compliance department or the Compli-ance Officers in the regions.

Sustainability: an obliga-

tion which is also a key

task for the future

It is just a short step from acting responsibly to sus-tainability. After all, you need to know what tomor-row will bring if you are

want to know what compa-nies are doing precisely in this area. Those stakehold-ers range from employees and customers, to banks, insurers, government, and authorities. ZF has there-fore put in place a system-atic sustainability audit, which will pave the way for a report in early summer 2013, and which is geared to the internationally ac-knowledged principles of the Global Reporting Initia-tive (GRI). This will allow ZF to report its manage-ment strategies, activities, and key performance indi-cators regarding environ-mental protection, product responsibility, employees, social commitment, pur-chasing and compliance,

Trust is increas-ingly based on transparency: You need to say what you are do-ing and do what you say if you want to be seen as reliable.

the principle of sustained viable development was summed up so aptly 300 years ago by the Saxon mine administrator Hans Carl von Carlowitz when he declared that only the same amount of timber could be cut from the forest that would grow back in the same period. This was later turned into the motto “Live off the interest, not the capital”. For the un-listed company ZF, sustain-ability begins with ensuring our own financial indepen-dence. This is a daunting task whenever growth is strong: ZF is set to invest over € 2 billion in product start-ups, product localiza-tion, and capacity upgrades in 2013 and 2014. The

Our responsibility

Our traditionally high aspirations of complying with applicable law are reflected in our compliance principles. Our commitment to sustainability includes resource conservation, environmental protec-tion, and respect for our social and cultural environment. We accept social responsibility, contribute to the public, and are committed to social and humanitarian issues, as well as culture, education, and sports. The welfare of our staff and their families deserves our special attention.

hans carl von carlowiTz summed up the then notion of forestry in 1713 for the first time, formulating the principle of sustainability in the process.


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and make them transparent and comparable. ZF has set up a steering committee to coordinate the cross-functional project. The committee is made up of managers from the afore-mentioned areas. The Compliance/Sustainability department brings together all sustainability-related ac-tivities and constitutes the key hub where all the pieces come together – from customer inquiries through to internal commu-nications activities.

Reporting: supply chain

as a challenge

In light of the tradition of value-oriented management at ZF and a global environ-mental organization that

has been an integral part of the business for many years, it is hardly surprising that the audit revealed a slew of positive aspects and numerous activities in rela-tion to environmental pro-tection in particular. One example is the interna-tional “Year of Energy”, which was proclaimed in 2012 and to which all loca-tions contributed with best practices. In conjunction with this initiative, the Board of Management is-sued the ambitious Group-wide target of reducing spe-cific energy consumption through 2015 by 20 percent compared with 2010 and CO2 emissions by 20 per-cent through 2020. Clearly, optimization was also

necessary to push sustain-ability in all areas of activ-ity worldwide. After all, the GRI and, of course, custom-ers, most of whom already publish stringent sustain-ability reports, expect inter-national figures from a mul-tinational company – not just on energy and emis-sions as already provided within the context of envi-ronmental protection, but also on occupational health and safety, training, or vol-untary social work. This proves very challenging when the requirements go beyond company boundar-ies. For example, the com-pany intends to report on sustainability aspects in the supply chain. A start has also been made here: The

Sustainable Supplier Man-agement project launched by Supply Chain Manage-ment & Purchasing in 2012 is based on the ZF Environ-mental policy, the ZF Cor-porate Social Responsibility policy, as well as the ten principles in the Global Compact, and applies these principles to the supply chain. ZF’s 3 500 suppliers have already signed up to comply with the basic prin-ciples; compliance is also audited at regular intervals. Suitable measures and methods are adopted if sup-pliers violate these princi-ples. The next step will in-volve integrating environ-mental and social standards into the supplier selection process; this will range from

International value chains de-mand new man-agement tools to balance out opportunities and threats.

ProcuremenT Guaranteeing our customers environ-mental and social standards in the supply chain.

assessing suppliers using supplier self-assessments to audits, which may be con-ducted unannounced. The long-term goal is a purchas-ing strategy which does without materials from critical procurement sources while reducing costs by replacing certain raw mate-rials, for instance.

suPPliers Ascertain compliance with the principles on the basis of self-assessment and audits.

zf aims To reduce iTs co2 emissions by

20 PercenT Through 2020 compared with the average 2006 – 2012 figure.

20 %

89 %aT zf, 100 ouT of The 121 locaTions are certified to the international environmental management standard ISO 14001. That is equivalent to


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ZF believes that getting young people interested in tech-nology is a responsibility and a must for the future. The Knowledge Workshop “Wissenswerkstatt” is a prime example of what can be achieved by combining passion and social commitment. Together with the City of Friedrichshafen, the Friedrichshafen Chamber of Commerce and Industry, Südwestmetall, and the Association of German Engineers (VDI), ZF is funding a learning center for children and young people. ZF engineers are also involved personally and provide vivid insights into the power of technology. Following the model project in Friedrichshafen, the Knowledge Workshop will also be set up at other ZF locations in Germany including Passau and Schweinfurt.

Education: the key strategic area

Investment in education is a key focus area for ZF, with university funding constituting a long-term commitment.

In light of the current shortage of engineers, ZF is also in-volved in an intense university marketing campaign world-wide to attract talent to ZF and forge links with the com-pany. Close collaboration with universities creates good relationships between junior staff and the company early on through internships and final thesis projects. The com-pany is cooperating with renowned universities, such as the RWTH Aachen University and the University of Stuttgart, and sponsors endowed chairs. ZF is also cooperating with Tongji University, one of China’s top universities. In the United States, ZF has connections with institutions such as the University of Rhode Island and the University of Michigan. And since the company will not only need well-trained engineers in future, ZF in Friedrichshafen also funds the Zeppelin University. The private university founded in 2008 has gained a reputation over the past few years as an interdisciplinary educational institution that

The company’s future is intimately tied up with social development. ZF is committed to youth and education, culture and sports – wherever the company operates and support is needed. The nonprofit association “ZF hilft” operates worldwide and helps people in need.

Key to Success

Attracting talent worldwide to ZF and forging links with the com-pany early on.

cooPeraTion ZF cooperates with many universities in Germany and worldwide.

fuTure Laying the foundations for a successful future for the individual and the company


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bridges the divide between business, culture, and politics. Dr. Stefan Sommer, ZF CEO, is convinced that this will help safeguard our own future, since education is set – more than ever – to become the key to success; for employ-ees and for companies.

Numerous activities beyond pure teaching are helping ZF become more well-known and popular among potential re-cruits. ZF is a partner of Formula Student, an international design competition where students from different areas of study can compete in various disciplines with race cars they built themselves. All ZF locations in Germany are tak-ing part in the annual Girls’ Day, which is aimed at inspir-ing girls and young women to enter careers in engineering. ZF is currently ranked 23rd on the list of the most popular employers among future engineers – according to the findings of the latest Trendence Institute study in 2012.

According to the survey those polled primarily associated ZF with team spirit, work-life balance, and interesting jobs – core elements of the corporate culture. Graduates from IT and economic science disciplines also regard ZF as a reli-able employer that opens up career opportunities and as-sumes responsibility for its employees. Presentations by ZF executive managers at universities, donations of computers for schools, or support for the research initiative for adoles-cents “Jugend forscht” also underscore ZF’s commitment to education to ensure a future-oriented society. The Lemförde location participated in the “Future Camp” organized by the Foundation of German Business (Stiftung der Deutschen Wirtschaft), offering teenagers insights into the world of work through various workshops. At the Schweinfurt location, ZF is taking part in the Business@school project. As part of this initiative, the Boston Con-sulting Group gives schools a hands-on look at business

issues, with the goal of firing young peoples’ enthusiasm for the world of business. In Brazil too, education is at the heart of ZF’s commitment: The local ZF locations support the “Pescar” and “Formare” projects, two aid initiatives which help children from socially disadvantaged families to complete their vocational education.

Culture and sports: in the region, for the region

For more than 20 years, the ZF Art Foundation has been supporting artists and musicians, festivals and concert se-ries, making an indispensable contribution to a vibrant cultural life in the Lake Constance region. The Foundation only supports nonprofit institutions which contribute to cul-tural diversity. The Foundation also provides scholarships for visual artists from Germany, Austria, or Switzerland and presents the biennial ZF Music Award to highly talented young pianists. As part of the public piano competition,

ZF Race Camp

17 teams with 22 self-built designs, including eleven electric race cars, started on the Friedrichshafen trade fair grounds in June 2012 – setting a new record for the number of participants in the training camp for the Formula Student, the university competition for the next generation of engineers. Prospective ZF junior staff put their designs to the test with help from 35 ZF engineers and experts from the various ZF expert departments and a 60-strong organization team. Six ZF-sponsored teams currently rank among the top ten in the Formula Student in which about 500 teams participate worldwide.

neXT generaTion Designing and testing it yourself is the pinnacle of achievement.

zf engineers They also donate their own time to share their knowledge.

young TalenT ZF offers young people many development opportunities, at all locations.

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Modern Art and the Scharfrichterhaus (executioner’s house) receive support. Together the two foundations support the renowned Passau European Festival Week. ZF also funds cultural events at the locations in Bayreuth and Auerbach. In Schweinfurt, the company regularly sponsors traveling exhibitions of regional, contemporary artists.

Professional sport is now virtually impossible in many disciplines without sponsors from business and industry. ZF has also done its part by sponsoring the VfB Friedrichs-hafen volley ball team since 1995. And has shared in their

young pianists from around the world demonstrate their skills and provide the audi-ence with an unforgettable musical experience. At the Passau location, the local ZF Culture Foundation pro-motes the arts and culture. Regional and local artists as well as institutions such as the Wörlen Museum of

success: The team meanwhile has twelve German Champi-onships to its name and even won the Champions League in 2007. In 2008, the venue for home matches in Friedrichs-hafen was renamed the ZF Arena. At the ZF location Eger in Hungary, the successful water polo team publicizes the name of the sponsor ZF nationally. ZF is just as involved in recreational sports, supporting many teams from various disciplines in the regions. Through its involvement in many of these sports, the company also encourages its employees to get involved. Not least because physical fitness and the ability to relax keep you healthy.

zf arena Funding for professional sport on home soil: the VfB Friedrichshafen volleyball team.

waTer Polo The successful team in Eger, Hungary, is the perfect ambassador for ZF.

We see it as our social responsi-bility to promote a lively sense of community in the regions.


Jörg mandernach ZF Art Foundation 2001 scholarship stu-dent in the ZF tower studio in the Zeppelin Museum.

zf arT foundaTion Shaun Choo wins the 2010 ZF Music Award.


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In April 2005, ZF set up the nonprofit association “ZF hilft” to help victims of natural disasters, epidemics, accidents, famine, and armed conflicts quickly without any bureau-cracy. The substantial donations made by ZF employees to help victims of the tsunami in Southeast Asia provided the impetus for the association.

“ZF hilft”: for a better world

ZF staff and the company itself have donated more than € 4 million worldwide to “ZF hilft” since the project got un-derway. “ZF hilft” insists that projects are long term and have a sustainable impact if they are to be chosen to

receive funding. Helping people to help themselves is the primary goal, with food, water, and education as the three key elements. Since ZF assumes any administra-tive costs all the donations go fully to the aid projects – a great incentive for employees to get involved through “ZF hilft”. The association also provides regular updates on where the money has gone and what exactly has been achieved. Such openness allows employees to follow how the projects develop over many years and instills a sense of confidence – be it a community center in a Brazilian slum district or new sources of income for small farmers.

For a better worldSri LankaFollowing the tsunami, two houses offered widows and orphans a new home. A “Mother and child” emergency ward and a training center for agricultural professions have received fund-ing since 2007.

SyriaIn 2012, aid was distributed to the refugees in emergency shelters who had fled the incessant fighting in the country’s capital.

GermanyIn Germany, employees and com-pany management also initiated aid projects, including donations for building a new mother-child center at Friedrichshafen hospital or for the Bavarian bone marrow donor organization, Stiftung Knochenmarkspende.

SudanThe drilling of new wells, install-ing solar pumps to existing wells, and setting up water distribution stations in 2008 improve the water supply in three large refu-gee camps.

KenyaIn 2012, “ZF hilft” helps secure the water supply for the local population and the civil war refugees in the large camps in the border region between Chad and Sudan.

Haiti The “Waldgärten” [forest gardens] project helps stop karstification and also enables small farmers to feed their families by cultivating the land.

BrazilA community center is being built in a slum district of the city of Fortaleza; the center provides vocational courses for adolescents and a special outpatient clinic for around 10 000 inhabitants.

IndiaAccess to micro-loans primarily helps enterprising women to improve their lives by setting up a small business.

JapanAbout 1 700 households in the crisis region around the destroyed port city of Sendai received aid packages follow-ing the 2011 tsunami.

United StatesAfter the devastating tornado that ripped through the South of the United States in April 2011, ZF management and employees gave donations for the victims.

PakistanFollowing the earthquake in 2012, 2 000 people found safe shelter in the accommodation set up jointly with the German Federal Agency for Technical Relief (THW).


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The limited liability company Zahnradfabrik is founded in Friedrichshafen on August 20, 1915 and is entered into the commercial register on September 9. The founding signatories are Luft schiffbau Zeppelin GmbH, represented by Alfred Colsman, and Max Maag Zahnräderfabrik Zurich, Switzerland. The object of the company is to produce gears and transmissions for aircraft, motor cars, and motorboats. ZF files ten patents including the one for the Soden transmission − named after the first managing director Count von Soden − which was developed for automobiles and ready for production. This transmission would, however, stay on the drawing board, with manu-facturing output devoted entirely to meeting the needs of the war effort. From 1919, ZF concentrates on developing and producing vehicle transmissions; the 8 HP car transmission is launched in the same year.

1915Building on our heritage

Visionaries of industrial history

Alfred ColsmanAlfred Graf von Soden- Fraunhofen

Dr. Jürgen Ulderup

Ernst Sachs

’20sDespite the general economic recession, ZF GmbH is success-fully transformed into a joint stock company in 1921. The company’s initial capital stock is 5 million marks. 4 million marks is held by Luftschiffbau Zeppelin GmbH, 1 million marks by Maag Zahn-räder- und Maschinen AG, Zurich, Switzerland. At the Berlin Auto Show in 1921, ZF presents the groundbreaking Soden transmis-sion to the automotive world. The vehicle transmission built on the basis of the patents filed is a 4-speed pre-selection transmis-sion with a gear selection device on the steering wheel or the dashboard. The standard trans-mission, which is mass-produced on the basis of a simple design with identical components, proves more successful by meeting many of the customers’ requirements. It is suitable for passenger cars and commercial vehicles, and can be tailored to different engine ratings and applications. Follow-ing the introduction of multidisk synchronizers, the first synchro-nized ZF transmission, the low-noise Aphon transmission, is produced from 1929 for passen-ger cars and trucks. It is installed in vehicles made by automakers Adler, Horch, Daimler-Benz, Stoewer, and Wanderer. The ZF workforce totals 530 in 1929.

Ferdinand Graf von Zeppelin

Always a Step AheadTechnology pioneers transformed their vision of unlimited mobility into inventions and patents. Developments based on this groundbreaking work not only shape entire industries, they have become an integral part of our daily lives.


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The transfer of 89.8 % of ZF shares to the Zeppelin Foundation puts an end to years of legal uncer-tainty regarding the distribution of the vacant shares of Luftschiffbau Zeppelin GmbH. At the beginning of the fifties, ZF mainly produces constant-mesh transmissions for commercial vehicles. In 1953, ZF acquires the license for the Gemmer steering gear; barely a year later the Schwäbisch Gmünd plant produces the one millionth steering system after the war. From 1954, this plant also pro-duces the ZF Gemmer hydraulic steering systems for commercial vehicles and passenger cars. A few years later, the ZF ball-and-nut power steering system becomes established in the market; 2.4 million units of the 8052 model alone are produced for passenger cars. Production of 4- and 5-speed manual trans-missions for passenger cars, the Synchroma transmissions

featuring ZF lock bar synchro-nizers, is ramped up. The trans-missions are primarily installed in BMW volume-production cars. ZF founds a subsidiary on another continent for the first time in 1958: ZF do Brasil in São Caetano do Sul in Brazil. The production lineup includes transmissions and gears for manufacturers of motor vehicles and tractors. Altogether ZF has more than 10 000 employees in all plants for the first time.

In 1932, ZF takes over a license for manufacturing the American Ross steering gear and sells approximately 10 000 units in the first year alone. The first fully synchronized transmission for volume-production automobiles, which runs smoothly in all gears and is yet inexpensive, is launched. Customers for the 4-speed transmission include Mercedes, Horch, and BMW. The license agreement for an electro-magnetically operated multi-disk clutch provides the foundation for the Mechanical Engineering business unit. In Friedrichshafen, the construction of the A 12 tractor transmission starts

in 1937; it is the beginning of an entire generation of transmissions for agricultural machinery. Work begins on developing marine reversing gearboxes, with designers able to draw on their experience in building airship trans missions. As new orders increase, the decision is made in the same year to set up two additional plants in Schwäbisch Gmünd, which mainly produce gears and vehicle transmissions as well as locking differentials. As part of ongoing rearmament in Germany, ZF supplies trans-missions for tracked vehicles and military trucks; the manu-facture of other products declines rapidly.

Production of military vehicle transmissions takes priority during the war years. New manufactur-ing sites are set up in Alsace and Passau to meet increasing demand from the wartime economy. In April 1944, an air raid destroys 80 % of the parent plant in Friedrichshafen. The proportion of forced labor grows inexorably during the war in all plants; there are 2 800 non-German workers at ZF at the end of 1944. At the end

’30s

’40s’50s

of the war, French troops occupy the plant and grant a limited production permit for commercial and agricultural machinery. At the same time, the Champion is created, a simple subcompact car which is manufactured entirely by ZF. In August 1946, after months of negotiations, Zahnradfabrik Passau GmbH is founded, with production of tractor transmis-sions starting shortly after. The assets of the Zeppelin Foundation are transferred to the City of Friedrichshafen in 1947 by legal order. In August 1948, ZF is re-moved from the list of companies to be dismantled, bringing ZF’s forced administration to an end shortly after. Following the currency reform in June, the company prepares new balance sheets and is able to put the business on a sound financial footing. The reconstruction of plant facili-ties, the renewal and upgrade of machine equipment are in full swing at the end of the 1940s.


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are booming and account for around 45 % of total sales. Volume production of automatic transmissions for commercial vehicles gets underway with the all-new ZF-Ecomat range with four to six speeds. This model range is constantly adapted to market requirements and deci-sively contributes to the com-pany’s success in the years to come. In 1979, ZF sales exceed DM 2 billion for the first time. The company now has a work-force of more than 23 000 em-ployees worldwide.

After having doubled sales in the previous five years, total sales of the ZF Group exceed one billion deutsche marks for the first time in 1970. The workforce has reached 19 000 employees. Together with the American transmission manufacturer Borg-Warner Corporation, ZF Borg-Warner GmbH is established in 1970; two years later, it becomes ZF Ge triebe GmbH, following the separation from Borg-Warner. The aim is to produce automatic transmissions for the European market at the new Saarbrücken location. In keeping with its proud heritage, ZF returns to developing and producing transmissions for aviation applications. As a result, the BO 105 helicopter is equipped with the ZF FS 72 transmission system. In the mid-70s, exports

specialist in driveline and steering technology and produces at nine plants. With the volume production launch of the first automatic car transmission developed by ZF, a new success story begins for the company. The 3 HP 12 is a three-speed automatic transmission for passenger cars with a displace-ment of between 1.5 and 2.2 liters. BMW and Peugeot are the first customers, joined soon after by Alfa Romeo.

Based on a license agreement concluded with Rockwell Standard Corporation in 1957, volume production for planetary steering axles and planetary rigid axles for trucks and tractors begins in Passau in 1960. Production is running at full capacity to fulfill the major order from Auto Union for 340 000 transmissions for the DKW Junior. In 1961, ZF ventures into the world of Formula 1 racing and supplies the transmission for the Lotus of legendary racing driver Jim Clark. In 1965, on the occasion of its 50th anniversary, ZF presents a product lineup which encompasses the full array of driveline and steering technol-ogy. The company has become the largest independent European

’60s

’70s

’80sThe company's worldwide opera-tions consistently gain momen-tum. ZF founds ZF Japan and ZF of South Africa, following in the footsteps of ZF of North America a year earlier. ZF is represented with its own companies in India and South East Asia; a production location is set up in Georgia, United States, in 1986. After four years of development work, the ZF-Ecosplit transmission for heavy commercial vehicles is ready for volume production; the trans-mission boosts fuel economy by offering an extended range of gear ratios. In the following years, more than two million units of this heavy CV transmission are produced. In 1984, ZF acquires a majority stake in the Lemförder Group, which was founded by Dr. Jürgen Ulderup. The company produces ball joints, tie rods, and drag links, as well as precision parts made of plastic, and rubber-metal compounds – a portfolio which supplements the product range of transmissions, axles, and steering systems. ZF's first 4-speed automatic transmission is launched; barely a year later, the 4 HP 22 E derivative is avail-able with an electronic control unit. In Schwäbisch Gmünd, the ZF-Servotronic goes into produc-tion, an individually programmable speed-sensitive power steering system for passenger cars.


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Customers include BMW, Audi, and VW. One year later, the ZF active steering system makes its market debut. It is installed in the BMW 3 Series, 5 Series, and 6 Series models. Schweinfurt becomes home to ZF's first pro-duction facility in Europe for the industrial manufacture of hybrid drive modules in 2008. The 7-speed dual clutch transmission, a joint development of Porsche and ZF, enters volume production. The 7DT sports transmission combines excellent acceleration and driving performance with low fuel consumption. In November 2008, the European Commission approves the acquisition of Cherry Corporation with some 2 800 employees worldwide. The company is integrated into the ZF Group as the independent Electronics Components business unit and trades as ZF Electronics GmbH.

The acquisition of Mannesmann Sachs AG in October 2001 with the four Sachs business divisions, Powertrain, Chassis, Rubber-Metal (Boge), and Aftermarket Trading, is one of the greatest milestones in the company's history. The Sachs business is pooled in the new Powertrain and Suspension Components division. The 6-speed automatic transmission 6 HP 26 for passenger cars, which was developed by ZF in just four years, is fitted to the BMW 7 Series models from 2001. In 2006, ZF starts volume production of its new-generation 6-speed auto-matic transmissions as well as production of automatic transmis-sions in China. ZF Lenksysteme launches volume production of the ZF-Servolectric electric power steering system in 2002.

technology, but also in chassis technology: In 1997, ZF starts production of complete front and rear axles for the new Mercedes M-Class. At the beginning of 1999, ZF Lenksysteme GmbH in Schwäbisch Gmünd, a 50/50 joint venture with Robert Bosch GmbH, commences business activities. ZF contributes with its Steering Technology division and Steering Columns business unit, while Bosch brings its electronics exper-tise to the table. ZF joins the Ger-man Business Foundation Initia tive, a fund set up to compensate forced laborers in the war years.

At the beginning of 1992, ZF starts trading under its new name: ZF Friedrichshafen AG. This new name takes account of the broader product portfolio and expansion of operations in non-European markets. In 1993, ZF Friedrichshafen AG and the Chinese Beijing North Vehicle Works Group establish a Service Center in the People’s Republic of China. The automated 12- and 16-speed ZF-AS Tronic transmis-sion makes its debut in heavy trucks in April 1997 − a milestone in terms of ease of operation. ZF is not only a specialist in driveline

’90s2000 to

2015

The 8-speed automatic transmis-sion for passenger cars enters volume production in 2008. ZF acquires Hansen Transmissions, the wind turbine gearbox manu-facturer, and incorporates it as the ZF Windpower business unit in 2010. ZF itself entered the market for wind turbine gearboxes barely a year earlier. 2011/12 sees the strategic realignment of the divisions. The main German sub-sidiaries are renamed ZF Fried richs-hafen AG. Elsewhere, the foun-dations for the anniversary year 2015 are being laid: the building work for the new corporate headquarters in Friedrichs hafen gets underway; the inauguration is slated to coincide with the Group’s centennial in 2015. The ZF Forum is home to fixed exhibi-tion spaces, allowing ZF to open itself up to the general public and interested parties. The Group’s strong global position will also be reflected in the business figures in 2015. For the first time, the Group will be generating more than half of its sales from outside Europe.

Corporate Structure

Production Figures 2012

1.9 million Axle drives 2 million Automatic transmissions* 3 million Chassis systems 4 million Torque converters 8 million Car clutches 11 million Gearshift systems, electronics and sensor modules 11 million Steering systems 65 million Shock absorbers660 million Chassis components**

Corporate Production

Electronic Systems

CEO, Corporate Market, Research and Development

ZF Services

Corporate Finance, Controlling, IT, Process Management

Corporate Human Resources, Governance

Corporate Materials Management

Corporate Quality

ZF Friedrichshafen AG

Truck & Van DrivelineTechnology

Bus Driveline Technology

CV Axle Systems

CV Chassis Modules

CV Damper Technology

CV Powertrain Modules

Automatic Transmissions

Manual Transmissions /Dual Clutch Transmissions

Axle Drives

Powertrain Modules

Die Casting Technology

Chassis Systems

Chassis Components

Rubber & Plastics

Suspension Technology

Off-Highway Systems

Test Systems

Special Driveline Technology

Marine Propulsion Systems

Aviation Technology

Wind Power Technology

Passenger CarSteering Systems

Commercial VehicleSteering Systems

Passenger CarSteering Columns

Global Aftermarket

Commercial VehicleTechnology

PowertrainTechnology

ChassisTechnology

IndustrialTechnology

Steering Systems*

Shareholders: 93.8 % Zeppelin Foundation and 6.2 % Dr. Jürgen and Irmgard Ulderup Foundation

* ZF Lenksysteme GmbH is a joint venture in which ZF Friedrichshafen AG and Robert Bosch GmbH each hold 50 % of the shares.

* Automotive** Suspension joints, cross-axis joints, tie rods, stabilizers, stabilizer links,

control arms, wheel carriers and hubs, chassis mounts, suspension mounts, precision plastics parts, v-links and 4-point links, struts, driver's cabin anti-roll bars

Status: May 2013

6HP, 7DT, 8HP, 9HP, AS TRONIC, BOGE, CHERRY, CPOWER, ECCOM, ECOSPLIT, ECOLIFE, LEMFÖRDER, OPENMATICS, SACHS, TRAXON, ZF PARTS, ZF PLUS are registered trademarks of ZF Friedrichshafen AG.

Servolectric, SERVOTRONIC are registered trademarks of ZF Lenksysteme GmbH.

Editorial office:Corporate Communications

Layout/Design:Advance Consultants GmbH, D-10719 Berlin, Germany

Contents conception/text:Die Wortwerkstatt GmbH, D-72017 Tübingen, Germany

Text:Akzente Kommunikation und Beratung GmbH, D-80469 Munich, Germany

Powertrain Technology

Industrial Technology

Chassis Technology

Commercial Vehicle Technology

ZF Lenksysteme GmbH is a joint venture of ZF Friedrichshafen AG and Robert Bosch GmbH.

Steering Systems

ZF Services

Brands of ZF

MOTION AND MOBILITY

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